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Jakarta Post

The easing money cycle goes on

  • The Jakarta Post

  /   Mon, August 26 2019   /  12:59 am

Buoyed by stable, low inflation, but concerned over the lower-than-expected economic growth (5.05 percent) in the second quarter and the global economic downturn, Bank Indonesia (BI) decided last Thursday to lower its benchmark seven-day reverse repo rate by 25 basis points to 5.5 percent, deposit facility rates by 25 bps to 4.75 percent and lending facility rates by 25 bps to 6.25 percent.The accommodative policy stance will help maintain economic growth amid global economic uncertainty and rising protectionist trends. This and the progrowth fiscal plan next year, combined with the faster pace of structural reforms, will strengthen economic resilience. The policy rate cut was widely predicted by most analysts as BI, for its part, had signaled last month after making the first 25-basis point cut to 5.75 percent since September 2017 that it would adopt an accommodative stance while simult...