Indonesia cuts interest rate by 25 bps

Jakarta (ANTARA News) - Indonesia's central bank Thursday cut its benchmark interest rate by 25 basis points to 8.50 percent, deputy governor Aslim Tadjuddin said.

Since May last year, the central bank has now cut the rate, known as the BI rate, by a cumulative 425 basis points.

Bank Indonesia public relations director Budi Mulya told reporters that the decision took into account the prospect of hitting the consumer inflation targets for this year of 5.0-7.0 percent and for next year of 4.0-6.0 percent.

He said the central bank's board of governors had thoroughly assessed the latest economic and monetary conditions.

"In general, the economic expansion has continued into the first quarter, with more balanced support," he said, referring to gains in private and government consumption, exports and investment.

"The realized first-quarter GDP growth was higher than BI's initial estimate. It was supported primarily by private consumption and exports," he was quoted by AFP as saying.

Gross domestic product grew 6.0 percent year-on-year in the first quarter.