Bank Indonesia cuts benchmark interest rate to 7 per cent

JAKARTA, Indonesia – Indonesia’s central bank cut its benchmark interest rate Thursday for the second time this year to help economic growth.

The decision to lower the rate by a quarter points to 7 per cent was announced by Bank Indonesia at the end of a two-day meeting of its Board of Governors.

The Bank said the move was consistent with its greater room to ease monetary policy on the back of solid macroeconomic stability, especially with lighter inflationary pressure and less uncertainty in global markets.

It projected economic growth in 2016 would be in the 5.2 per cent to 5.6 per cent range, stimulated by infrastructure projects.

The rate was first lowered last month after staying at 7.5 per cent since February 2015 when it also was cut by a quarter point from 7.75 per cent.

Bank Indonesia said it will continue to strengthen co-ordination with the government to control inflation, stimulate growth and speed structural reforms.