Jakarta – The central bank decided to cut its benchmark rate on Thursday in the wake of a global coronavirus outbreak it believed would trigger a short-term slowdown in the economy in the near future.

Bank Indonesia cut the seven-day reverse repurchase rate by 25 basis points to 4.75 percent after keeping the rate unchanged in the previous three months.

It also lowered the rates of deposit facility and lending facility by 25 basis points to 4 percent and 5.5 percent, respectively.

The meeting by the central bank's board of governors revised their global economic growth projection from 3.1 percent to 3 percent this year. But the global growth will rebound to 3.4 percent from the projected 3.2 percent next year, the bank said in a statement.

"The Covid-19 outbreak has increased risks in global financial markets, prompting a shift in global fund flow from developing countries to assets and commodities considered as safer, and will eventually add pressures on the currencies of those developing countries," the statement read.

The central bank lowered the predicted range of Indonesia's economic growth from between 5.1 and 5.5 percent to 5.0 and 5.4 percent this year, arguing that the coronavirus scare will put the brakes on global economic recovery.

Source: https://jakartaglobe.id/business/central-bank-cuts-benchmark-rate-after-threemonth-break