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BI cuts benchmark rate by 25 bps
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A man walks past the Bank Indonesia (BI) headquarters in Jakarta on Sept. 2, 2024. (Reuters/Ajeng Dinar Ulfiana)
B
ank Indonesia has cut its benchmark interest rate by 25 basis points (bps) in an effort to boost economic growth while inflation is under control.
Following the central bank’s two-day monthly policy meeting, BI Governor Perry Warjiyo announced at a press conference in Jakarta on Wednesday that the key interest rate, the BI Rate, would be cut to 5.5 percent from 5.75 percent.
The move is the second reduction so far this year after the monetary policy authority also reduced the BI Rate by 25 bps in January.
Perry said the loosening measure was taken to “push sustainable economic growth”.
Indonesia’s gross domestic product (GDP) only grew by 4.87 percent year-on-year (yoy) in this year’s first quarter, which marked a slowdown from the 5.02 percent yoy growth attained in the preceding quarter, the most sluggish growth since the pandemic.
Perry announced that the central bank revised its GDP growth forecast for 2025 to a range of 4.6 to 5.4 percent, down marginally from its initial estimate of 4.7 to 5.5 percent.
Read also: GDP growth drops below 5% in Prabowo’s first quarter
