Indonesia central bank delivers surprise rate cut to boost growth

Indonesia's central bank delivered another surprise interest rate cut on Wednesday, aiming to bolster economic growth even as investors’ concerns grow over the country’s fiscal discipline.

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Bank Indonesia trimmed the benchmark 7-day reverse repurchase rate by 25 basis points to 4.75 per cent, its sixth cut since it kicked off an easing cycle in September last year and taking borrowing costs to the lowest since late 2022.

All 31 economists surveyed by Reuters had expected no change after a cut in July and an unexpected easing in August.

Governor Perry Warjiyo said the central bank would continue to assess room for further cuts, underscoring economists’ expectations for more monetary loosening. BI has had to balance the need to keep the rupiah currency stable while supporting economic growth during the easing cycle, Warjiyo said.