JAKARTA. Bank Indonesia (BI) may still be able to cut its reference rates by 25 basis points (bps) at the beginning of this year, to anticipate global uncertainties, according to economists.
Eric Sugandi, Senior Economic Researcher at the Institute of Strategic Studies (IKS) at Universitas Indonesia, said that the cut is considered necessary to be done this month. "The cut will help provide stimulus to economic growth from the monetary side amid the risk of a global economic slowdown," Sugandi told Kontan on Tuesday (18/2) yesterday.
Meanwhile Bhima Yudhistira, an economist from the Institute for Development of Economics and Finance (INDEF), said that the cut in reference rate would increase lending to businesses. "And create confidence in the financial sector," explained Yudhistira.
Nevertheless, Yudhistira admitted that the impact of the rate cut could not be felt in the near future. But it will maintain the cost of domestic production, and anticipate an economic slowdown. (KR/AR)