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Indonesia slashes rates as tepid global growth bites
(AFP) – Indonesia’s central bank slashed interest rates yesterday for the third month in a row as Southeast Asia’s biggest economy feels the sting of the US-China trade war and tepid global growth.
Bank Indonesia (BI) lowered its key lending rate by 25 basis points to 5.25 percent, prompting speculation that more cuts could be in store as central banks around the world adopt softer monetary policies.
“This is a pre-emptive measure to boost the momentum of growth amid a global economic slowdown,” bank governor Perry Warjiyo said.
The move comes after the US Federal Reserve announced its second interest rate cut of the year as it pointed to a slowing world economy and trade tensions with Beijing.
And last week the European Central Bank unveiled a massive stimulus programme rate cut to goose the sluggish eurozone economy.
“The slowing economy and subdued inflation mean BI would certainly like to cut rates again in the coming months,” said Gareth Leather at research house Capital Economics.
“Overall, we are sticking with our view that BI will cut interest rates twice more over the current easing cycle,” he added.
Indonesia has been grappling with weaker prices for key commodities like coal and palm oil as the world economy falters and demand dries up.
Growth eased to 5.05 percent in April-June, the slowest quarterly expansion in two years.
Source: https://www.khmertimeskh.com/50644886/indonesia-slashes-rates-as-tepid-global-growth-bites/