Indonesia cuts rates for 4th time this year

JAKARTA, Indonesia – Indonesia’s central bank Thursday, June 16, cut its key interest rate for the 4th time this year as policymakers look to stimulate growth in Southeast Asia’s largest economy amid global weakness.

Bank Indonesia lowered the rate by 25 basis points to 6.50%. The bank made cuts of the same amount in the first 3 months of this year.

Rates were left virtually unchanged in 2015, with the bank reluctant to make a move amid high inflation. But prices have risen slowly in 2016, with inflation hitting 6-year lows in May.

The bank’s head of communications Tirta Segara said policymakers hoped this latest rate cut would speed up growth across Indonesia’s economy, which is still expanding at its slowest pace since the global financial crisis.

“This cut is expected to strengthen domestic demand to further improve economic growth, while maintaining broader economic stability amid a weak global economy,” Segara said in a statement.

Indonesia’s economy has been losing steam for some time on the back of falling demand for its key commodity exports such as coal and palm oil, particularly from China. – Rappler.com