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Asia, Forex

Indonesia makes first rate cut in almost 2 years

JAKARTA, July 18 (Reuters) – Indonesia’s central bank on Thursday cut its benchmark interest rate for the first time since September 2017, ahead of an anticipated Federal Reserve cut late this month, as it tries to help lift economic growth.

Bank Indonesia (BI) trimmed the 7-day reverse repo rate by 25 basis points (bps) to 5.75%, as predicted by 23 of 33 economists in a Reuters poll.

BI’s two other main rates, for overnight deposit and lending facilities, were lowered by the same amount to 5.00% and 6.50%, respectively.

Analysts in the poll predicted the cut would be the first in an easing cycle that would unwind some of 2018’s six rate hikes, which totalled 175 bps and were made to defend the rupiah amid capital outflows. (Reporting by Maikel Jefriando, Tabita Diela, Gayatri Suroyo and Fransiska Nangoy; Editing by Richard Borsuk)

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