JAKARTA (Reuters) -Indonesia’s central bank delivered on Wednesday its fourth rate cut in an easing cycle that began in September, boosting support for Southeast Asia’s biggest economy as it faces pressure from weakening global trade and slowing domestic demand.
Bank Indonesia (BI) cut the benchmark 7-day reverse repurchase rate by 25 basis points to 5.25%, as expected by a slim majority of economists polled by Reuters.
It also trimmed the overnight deposit and lending facility rates by the same amount to 4.50% and 6.00%, respectively.
Governor Perry Warjiyo said at a briefing that the rate cut was consistent with the need to support Indonesia’s economic growth.
Sluggish household spending had already weakened Indonesia’s growth in the first quarter, while the outlook for subsequent quarters has been clouded by the impact of U.S. tariffs on global trade.
On Tuesday, President Donald Trump said the U.S. would impose a 19% tariff on goods from Indonesia under a new agreement with the Southeast Asian country.
BI’s GDP growth forecast for 2025 is within a range of 4.6% to 5.4%. The government’s official 2025 target is 5.2% and President Prabowo Subianto has pledged to lift growth to 8% by the end of his term in 2029.
Before Wednesday, BI had cut rates three times since September, taking pauses in between the cuts to try to head off volatility in the rupiah triggered by Trump’s trade policies and geopolitical tensions.
(Reporting by Gayatri Suroyo; Editing by David Stanway)
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