Bank Indonesia recently cuts its key policy rate by 25 basis points to 5.5%.
This is expected to help the country—the largest economy in Southeast Asia—to sustain its economic growth despite the ongoing US-China trade war which is predicted to slow global growth.
The country’s central bank expects the economy to grow between 5% and 5.4% in 2019. Last year, the country — Southeast Asia’s largest economy — grew by 5.17%.
Central banks in Asia such as those in India, Malaysia, the Philippines, Thailand and South Korea have cut rates this year.
The Reserve Bank of India (RBI) had its fourth rate cut this yearn early August, dropping its benchmark rate by 35 basis points to 5.4%.
The RBI also revised its 2019 growth forecast downward to 6.9% from 7%.
Thailand also cut its key rate in early August by a quarter-percentage point to 1.5% while Malaysia announced its Overnight Policy Rate cut by 25 basis point to 3% in May.
Malaysia is one of the few economies in Asia Pacific that reported growth in Q2 and the highest—4.9%—in the region.
In early August, the Philippines cut its benchmark interest rate by a quarter-percentage point to 4.25%.
At the same time, its central bank cut its inflation forecast for the year to 2.6% from 2.7% and next year’s inflation forecast to 2.9% from 3%.
The Bank of Korea also unexpectedly cut its benchmark interest rate in mid-July as it slashed economic growth and inflation forecasts.
The Korean central bank slashed its seven-day repurchase rate to 1.5% from 1.75%, expecting the economy to grow 2.2% this year, versus 2.5% projected in April, and inflation to rise 0.7%, versus 1.1% previously.