Indonesia cuts rate 25 bps to 6½%; says inflation still under control

By Wendy Van Sickle

Columbus, Ohio, June 16 – Bank Indonesia said its board of governors decided to lower the BI rate by another 25 basis points to 6½% at a meeting held Thursday.

The bank said the adopted policy mix is in line with the assessment of its board of governors that macroeconomic stability has been maintained, reflecting low inflation, a narrower current account deficit and relatively stable exchange rates.

The move will improve domestic demand to bolster economic growth momentum, amid sluggish growth worldwide, the bank said.

The bank said it will continue to work with the government to control inflation, to support growth stimuli and to ensure that structural reforms remain on track.

Domestic economic growth improved in the second quarter of 2016, although not as strong as previously predicted. Consequently, the bank said, domestic economic growth is projected to be in the range of 5% to 5.4% year-over-year in 2016.

Inflation remained under control in May, supporting the inflation target of 4% plus or minus 1% in 2016. Core inflation was 0.23% month-to-month or 3.41% year-over-year, “in line with anchored inflation expectations and sluggish domestic demand.”

The deposit facility rate was lowered to 4½% and the lending facility rate to 7%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.