Analysts suggest that the Indonesian central bank’s unexpected decision to lower interest rates is intended to invigorate economic expansion and strengthen local financial markets. Following the announcement, the Jakarta Composite Index rose by 1%, indicating positive investor sentiment. At the same time, the yield on the country’s benchmark government bond declined to 6.4%, reversing earlier increases. The rupiah, however, remained under slight pressure, ending the session 0.2% weaker at 16,270 against the U.S. dollar. The move is seen as a proactive step to bolster domestic demand amid global economic headwinds.
— news from Bloomberg
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Indonesia Surprise Cut to Boost Growth and Markets, Analysts Say
The Indonesian central bank’s surprise interest-rate cut would provide the domestic economy and local assets with a much needed boost, according to analysts. n nThe Jakarta Composite Index extended gains to 1% after the rate decision, while the benchmark bond yield erased earlier advances, slipping to 6.4%. The rupiah held earlier losses, closing 0.2% lower at 16,270 per dollar.