Indonesia cuts interest rate for 1st time since February 2021

ISTANBUL

Indonesia's central bank on Wednesday announced a cut in its policy rate by 25 basis points to 6%, in its first rate cut since February 2021.

Bank Indonesia had been gradually raising the rate since August 2022 from 3.75% to 6.25%, before keeping it constant since this April.

The bank said the decision was made after inflation forecasts for 2024 and 2025 were both lowered.

The strengthening and stability of the local rupiah exchange rate and the need to strengthen economic growth also contributed to the decision, it said.