Indonesia cuts key interest rate by 50 basis points
Indonesia's central bank cut its key interest rate by half a percentage point Wednesday to 7.75 percent to stimulate flagging growth in Southeast Asia's largest economy amid the global economic crisis.
The move came as the finance minister warned that plunging exports could hurt growth forecasts and donors launched a 5.5-billion-dollar standby loan facility to buttress the country's finances.
Bank Indonesia said the rate cut took into account figures showing export sales had plunged 36 percent in January compared to the year before, the biggest drop in 22 years.
"The economic slowdown in developed nations has triggered a drop in Indonesia's exports, which will eventually affect Indonesia's overall economic well being," it said.
Indonesia has cut its growth forecasts for 2009 from more than six percent to about 4.5 percent due to the global economic slump.
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