Bank Indonesia has cut its base interest rate by 50 points to 11.25%.

Bank Indonesia’s board of governors has cut its key policy rate, called the BI rate, by 50 basis points to 11.25% due to relaxing inflationary pressures. The last change in the rate, on 8th August, also saw a 50 point reduction, from 12.25 to 11.75%.

One analyst, one Alfiansyah from Sinar Mas Securities, said that the interest rate change would not have a negative effect on the Indonesian rupiah, while the US rate was still at 5.25% or thereabouts.

A Bank Central Asia director (BCA), Aswin Wirjadi, said, not surprisingly, that the cut would push retail rates lower and therefore have a positive effect on the economy.

Meanwhile the Coordinating Economy minister, Boediono, praised God on hearing the news and hoped that such decreases would continue.

Tags: Indicators