Indonesia Has Room for Further Interest Rate Cuts Amid Low Inflation: Bank Indonesia

Bank Indonesia (BI) Governor Perry Warjiyo has stated that there is still room for BI to cut its benchmark interest rate further, after remaining unchanged for four consecutive months, in order to support Indonesia’s economic recovery in the wake of the COVID-19 pandemic.

Speaking at a recent press briefing, Warjiyo added that the option remained open for rate cuts amid low inflation, with Indonesia’s annual inflation rate reaching 1.42% in September 2020, below the lower end of BI’s target of 2-4%.

However, Warjiyo noted that further cuts to the seven-day reverse repo rate would depend on global and domestic economic conditions, as well as local currency and extern...