Indonesian Rupiah Falls as Central Bank Cuts Interest Rates

The Indonesian rupiah slipped today after the Bank Indonesia decreased its main interest rate, while concerns about the European debt added to the downside pressure.

The Indonesian central bank cut the key rate by 50 basis points to 6 percent today. It was a surprise move that caught traders unprepared as analysts predicted that the cut would by 25 points at most.

The costs of Italy’s debt surged to the levels that forced Ireland, Greece and Portugal to seek aid from the European Union. The resulting pessimism hurts markets and the MSCI Asia-Pacific Index of stocks dropped as much as 3.5 percent.

USD/IDR climbed from 8,890.0000 to 8,970.0000 today as of 13:11 GMT.

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