Indonesia: BI cuts rates and lower growth forecast – ANZ

Bank Indonesia (BI) lowered its policy rate by 25bps today for the second straight month, to 4.50%, economists at ANZ Research inform. USD/IDR is trading at 15,866.50.

Key quotes

“Today’s measured 25bp cut was unsurprising, given the need to strike a balance between growth and external stability risks.” 

“BI now sees global economic growth at 2.5% (previously 3.0%) in 2020, before recovering to 3.7% (3.4%) in 2021.” 

“BI lowered its Indonesia 2020 growth forecast to 4.2-4.6% from 5.0-5.4%. For 2021, BI is forecasting growth of 5.2-5.6%.”

“We are maintaining our forecast for a further 25bp rate cut in BI’s current easing cycle.”