Indonesia’s central bank cuts rate to spur growth

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Indonesia’s central bank unexpectedly cut its key interest rate by 25 basis points on Tuesday (Feb 17) to spur growth as inflation slowed in Southeast Asia’s biggest economy.

It was the first time in three years that the bank had moved to trim the rate, to 7.50 per cent from 7.75 per cent.

The cut effectively cancelled out the quarter-point rate increase in late November. Bank Indonesia said that increase was aimed at stemming inflation, due to a more than 30 per cent increase in subsidised fuel prices.

“The policy is taken because Bank Indonesia is confident that inflation will remain under control,” the central bank said in a statement.

In January, Indonesia’s annual inflation rate was 6.96 per cent. The central bank sees inflation easing to 6.3 per cent in February, and then reach the lower end of its inflation target of 3 to 5 per cent at the end of the year.

Economists said the rate cut was likely made to spur growth, which fell to 5.0 per cent in 2014, the lowest in five years.

“The imports volume was surprisingly low in January, and this means there’s much lower economic activity at the start of this year, and this is probably the concern,” said Bank Central Asia’s chief economist, David Sumual.

New President Joko Widodo has set the growth target for this year at 5.7 per cent.

 

 

Source : Channel News Asia | February 17, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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