Indonesia's Central Bank cut its benchmark overnight rate by 25 bps to 6.5%, as Inflation rate slipped below 5%, which was its annual target rate. This was a surprise move by the Central Bank. Analysts expected the Central Bank to maintain status quo.

It has lowered the rate first time after it has raised rates for more than two years. The Governor of the Central Bank, Darmin Naustion said that the lower base rate was justified in view of cooling inflation, which is expected to remain in range between 3.5% and 5.5% in 2012