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Bank Indonesia cuts benchmark rate

02-10-2012 14:00 BJT

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Indonesia's central bank threw markets a curve ball. For the first time in three months, it unexpectedly cut its benchmark interest rate to support growth amid deteriorating external conditions.

Bank Indonesia lowered the reference rate by a quarter of a percentage point to 5.75 percent from 6. Indonesia joins other Southeast Asian nations such as the Philippines and Thailand in cutting borrowing costs over the past month.

The government there is becoming increasingly worried over shrinking external demand if Europe’s debt crisis continues on the track that its on.

It now predicts that the Indonesian economy could expand less than 6 percent this year, down from 6 and a half percent in 2011.

To deal with risks, the central bank has reduced the rate by a cumulative 100 basis points since October of last year.


Editor:Zhang Rui |Source: CNTV.CN

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