Bank Indonesia Rate Cut

September 19, 2019

At Bank Indonesia, a third consecutive 25-basis point cut was announced today in the seven-day reverse repo rate, which becomes 5.25%. Overnight lending and deposit rates were similarly cut by a quarter percentage point. Like the reductions at meetings in July and August, today’s as-expected preemptive action is meant to promote sustained growth with external stability. With the rupiah firmer, inflation low, and Indonesian money market liquidity adequate, it was felt appropriate to cut the rate again amid more intense global headwinds that are likely to result in GDP growth at the lower end of its expected range. The 75 basis points of easing since midyear almost reverses half the 175 basis points of tightening done last year.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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