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Bank Indonesia Cuts Key Interest Rate
Jakarta Globe | February 09, 2012

A woman tidies her daughter’s hair in downtown Jakarta on Thursday. In a surprise move, Bank Indonesia cut its key interest rate by a quarter percentage point to 5.75 percent, signaling its position to maintain growth in Southeast Asia’s largest economy. (AFP Photo) A woman tidies her daughter’s hair in downtown Jakarta on Thursday. In a surprise move, Bank Indonesia cut its key interest rate by a quarter percentage point to 5.75 percent, signaling its position to maintain growth in Southeast Asia’s largest economy. (AFP Photo)
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In a surprise move, Bank Indonesia on Thursday cut its key interest rate by a quarter percentage point to 5.75 percent, signaling its position to maintain growth in Southeast Asia’s largest economy.

The rate reduction — the third in five monthly meetings — comes as inflation continues to slow, giving the central book room to loosen monetary policy.

The central bank had been expected to keep its benchmark interest rate unchanged amid a bleak outlook stemming from the euro zone debt crisis and a weakening global economy, even as Indonesia’s inflation rate slows.

Economists said that slowing inflation would not provide a case for Bank Indonesia to make a move on monetary policy.