Key Indonesian interest rate cut by half a percentage point

Key Indonesian interest rate cut by half a percentage pointJakarta - Indonesia's central bank on Wednesday lowered its benchmark interest rate half a percentage point, its third-straight monthly cut, to support growth amid the global economic downturn.

Bank Indonesia Governor Boediono said the key overnight lending rate was cut to 8.25 per cent from 8.75 per cent.

Various indicators showed the global economy was more sluggish than what had been expected a few months ago, said Boediono, who like many Indonesians uses only one name. He said in a statement that the slowdown would have a significant impact on Indonesia, especially in the foreign trade sector.

Bank Indonesia has reduced its key rate by 1.25 percentage points since December to an eight-month low. The central bank had raised its key rate six times during 2008 to 9.5 per cent to curb inflation.

"Inflation pressure continues to ease," the central bank statement said. "In the past two-consecutive months - December 2008 and January 2009 - the inflation rates had declined." (dpa)

Business News: 
General: 
Regions: