Bank Indonesia cuts interest rate to 6%

The Bank Indonesia Board of Governors Meeting decided to lower the interest rate by 25 basis points to 6.00 per cent, according to the bank’s statement on Wednesday.

The Deposit Facility interest rate was also reduced by 25 basis points to 5.25 per cent, while the Lending Facility interest rate was decreased by 25 basis points to 6.75 per cent, the statement showed.

This decision is aligned with the Bank Indonesia’s forecast of low inflation in 2024 and 2025, which is expected to remain within the target range of 2.5±1 per cent. Additionally, the strengthening and stability of the Rupiah exchange rate and the need to stimulate economic growth were key factors influencing the rate cut.

Bank Indonesia will keep a close watch on the possibility of more interest rate cuts, taking into account the low inflation forecast, the stability and strengthening of the Rupiah exchange rate, and the need to encourage higher economic growth.

Attribution: Bank Indonesia’s report

Subediting: M. S. Salama