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Rate cut will depend on timing: Bank Indonesia deputy governor

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Bank Indonesia raised interest rates six times last year to bolster the rupiah after it came under attack during an emerging-market rout.

[JAKARTA] Indonesia's central bank is discussing the possibility of cutting interest rates but is waiting for the right time to do so, deputy governor Dody Waluyo said.

Policymakers want to maintain economic stability and a rate cut "will depend on the timing", Mr Waluyo said in an interview with Bloomberg Television's Kathleen Hays in Japan on Friday. Given the uncertainty in financial markets, the central bank needs to be "cautious", he said.

Mr Waluyo said the policy rate is not the only tool available to the central bank to support the economy. He also said the US-China trade war will hurt growth prospects in Indonesia, although there's the potential for some textile exporters to boost orders to the US.

Global central banks are shifting to looser monetary policy to bolster their economies in the face of a growth slowdown. The Reserve Bank of India on Thursday cut its benchmark rate for a third time, while Australia, New Zealand, the Philippines and Malaysia have also eased in recent weeks.

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Indonesia's policymakers are treading more carefully to avoid undermining the currency. Bank Indonesia raised interest rates six times last year to bolster the rupiah after it came under attack during an emerging-market rout.

Governor Perry Warjiyo hinted at rate cuts at last month's policy meeting, saying the central bank will consider whether there's room to ease, while remaining vigilant of global market risks and maintaining external stability.

BLOOMBERG