Bank Indonesia Open to Further Rate Cuts in 2021 to Support Economic Recovery: Perry Warjiyo

Speaking at a parliamentary meeting of the Finance Committee on the 9th of February 2021, Bank Indonesia (BI) Governor, Perry Warjiyo, stated that there was capacity to lower interest rates further, as required. The Governor made this comment following the release of 2020 economic growth performance data in the first week of February 2021, which saw Indonesia post its first full-year contraction in over twenty years.

Gross domestic product declined 2.19% year-on-year in the fourth quarter of 2020, with full-year GDP for 2020 down 2.07% YoY. COVID-19-affected investments and private consumption spending were cited as the main causes of the slower than anticipated pace of recovery.

In 2020, BI cut policy rates five times, shedding a total of 125 basis points, to support...