2025-09-17 10:32

After back-to-back cuts, markets had expected rate hold Benchmark rate, lending facility cut by 25 bps Deposit facility down 50 bps BI says liquidity ample, contradicting finance minister's comments Markets eyeing possible changes in BI mandate, economist says JAKARTA, Sept 17 (Reuters) - Indonesia's central bank delivered another surprise interest rate cut on Wednesday, aiming to bolster economic growth even as investors' concerns grow over the country's fiscal discipline. Bank Indonesia trimmed the benchmark 7-day reverse repurchase rate (IDCBRR=ECI) , opens new tab by 25 basis points to 4.75%, its sixth cut since it kicked off an easing cycle in September last year and taking borrowing costs to the lowest since late 2022. Sign up here. All 31 economists surveyed by Reuters had expected no change after a cut in July and an unexpected easing in August. Governor Perry Warjiyo said the central bank would continue to assess room for further cuts, underscoring economists' expectations for more monetary loosening. BI has had to balance the need to keep the rupiah currency stable while supporting economic growth during the easing cycle, Warjiyo said. "Our economic growth is still below the national capacity so demand needs to be pushed," Warjiyo told an online press conference, adding BI has been going "all out" to support economic growth while maintaining financial market stability. Indonesia's stock market (.JKSE) , opens new tab hit a record high after Wednesday's decision, while the rupiah firmed slightly. The rupiah is one of emerging Asia's worst performing currencies so far this year. It has dropped 2% against the U.S. dollar, with concerns over Indonesia's domestic finances and central bank independence offsetting broader global weakness in the greenback that has buoyed many other emerging market currencies. Financial markets also have been unsettled by two weeks of protests and unrest in many cities from late August, and by last week's abrupt sacking of respected finance minister Sri Mulyani Indrawati. There have been concerns about the central bank's independence following a "burden sharing" deal that will see BI help fund state programmes. Parliament is discussing changes to an existing bill that could strengthen the requirement of the central bank to support growth and also give it the power to recommend the removal of the bank's governor, lawmakers said on Tuesday. BI has now cut its main interest rate by a total of 150 basis points in this cycle, and has expanded liquidity through its open market operations and government bond purchases in the secondary market. The bank also cut its overnight deposit facility rate (IDCBID=ECI) , opens new tab by 50 bps and its lending facility (IDCBIL=ECI) , opens new tab rate by 25 bps to 3.75% and 5.50%, respectively. SIGNS OF SLOWDOWN Southeast Asia's largest economy grew 5.1% in the second quarter from a year earlier, the fastest pace in two years, but new Finance Minister Purbaya Yudhi Sadewa has said there were signs of slowing in the third quarter. Purbaya has criticised BI for keeping banking liquidity "dry", which has restricted bank lending, as he moved more than $12 billion of government funds from the central bank to commercial banks to be used for loans. In an apparent response, Warjiyo said liquidity was ample but demand for credit has been weak as businesses were in a wait-and-see mode. Banks have approved lending commitments worth 2,372 trillion rupiah ($144.41 billion) that have not been utilised, he said. Warjiyo also urged commercial banks to follow BI's lead in cutting rates, highlighting that their lending rates have fallen only 7 bps so far this year, a small fraction of the cuts in the central bank's major rates. However, Warjiyo said he welcomed Purbaya's decision to move government funds and the new $1 billion stimulus package for the fourth quarter, which he said could help bolster domestic demand. "Policymakers likely bet on a re-widening in the ID-U.S. rate differential after the U.S. Federal Reserve's anticipated cut this week, providing more headroom to lower domestic rates in the fourth quarter," DBS economist Radhika Rao said, adding markets were monitoring potential changes to BI's mandate. Gareth Leather, an economist with consultancy Capital Economics, said the surprise cut was likely to heighten concerns about BI's independence, while Warjiyo's dovish tone suggests further easing is coming. "That said, the government and central bank's clear pivot towards growth-supportive measures risks undermining confidence in policymaking," Leather said, warning any resulting adverse market reaction could force BI to reconsider its dovish stance. Local lender Bank Permata revised its forecast for the end-2025 benchmark rate to 4.50%, from 4.75% before, with more cuts expected in 2026, its economist Faisal Rachman said. The governor did not respond to questions on parliament's bill affecting BI. ($1 = 16,425.0000 rupiah) https://www.reuters.com/world/asia-pacific/indonesia-central-bank-makes-another-surprise-rate-cut-independence-concerns-2025-09-17/

2025-09-17 10:25

MUMBAI, Sept 17 (Reuters) - The Indian rupee rose on Wednesday, supported by a weaker dollar ahead of an expected U.S. Federal Reserve rate cut and upbeat sentiment from trade talks with Washington. The rupee rose to an intra-day peak of 87.73 during the session before ending at 87.8150, up 0.27% on the day, its best one-day gain since August 19. Sign up here. The rupee sank to a record low of 88.4550 last week on worries over steep U.S. tariffs but has since gained 0.2% this week, aided by upbeat U.S.-India trade talks and expectations of imminent Fed easing. "The negative bias on the rupee has eased slightly but it's quite likely that dollar demand related to importer hedging will limit gains near 87.50 in the near-term," an FX salesperson at a foreign bank said. Trade discussions between Indian and U.S. officials on Tuesday were "positive" and "forward-looking", New Delhi said on Tuesday. Meanwhile, money markets are fully pricing in a 25 basis point cut by the Fed later in the day with focus on remarks from Fed Chair Jerome Powell and policymakers' updated economic and interest rate projections. "While the near-term bias for the rupee is tilted towards further appreciation, we caution that any hawkish tilt from the Fed or adverse developments on the trade policy front could temper gains and reintroduce volatility," said Abhishek Goenka, founder & CEO of FX advisory firm IFA Global. Market participants will also watch whether policymakers considered a larger 50-basis-points cut as President Donald Trump pushes ahead with plans to overhaul a pillar of the U.S. economy and casts a shadow on the central bank's independence. https://www.reuters.com/world/india/rupee-posts-best-day-month-investors-gear-up-fed-outcome-2025-09-17/

2025-09-17 10:18

Baht up 8% against U.S. dollar in 2025 Exports and tourism sector facing strain New government promising to tackle baht appreciation BANGKOK, Sept 17 (Reuters) - The strengthening of Thailand's currency to a four-year high is a threat to exports and tourism, two key growth engines for the struggling economy and posing a major economic headache for the incoming government of Prime Minister . The baht is up 8% against the U.S. dollar this year, the second-largest gain amongst Asian currencies, behind only the Taiwan dollar. Sign up here. "A strong baht reduces export and tourist revenue via both pricing and volume effects," said Kobsidthi Silpachai, head of Capital Markets Research at Kasikornbank. "The baht's strength comes at a bad time ahead of the peak tourist season, which is likely to prompt holiday makers to shop elsewhere for better value." Southeast Asia's second-largest economy is struggling with U.S. tariffs as well as sluggish consumption, with households mired in debt. The state planning agency forecast economic growth of 1.8% to 2.3% this year, less than last year's 2.5% expansion, which already lagged regional peers. A rare bright spot has been exports, which have seen a value increase of 14.4% annually in the first seven months. A slowdown is now expected, following a 19% tariff imposed by the United States, Thailand's largest export market. Faced with a stronger baht, Thai manufacturers are also struggling to compete with regional rivals like Vietnam, even though it has a marginally higher tariff rate of 20%. "Instead of benefiting from the tariff gap, the strong baht ends up putting us at a disadvantage in exports. That's why many industries are complaining," said Nava Chantanasurakon, Vice Chairman of the Federation of Thai Industries. "If we don't address the baht issue, confidence in exports will drop." Industries that are particularly feeling the pain include the electronic parts industry and the automotive sector, he said. Thailand is a regional auto production and export hub for top Japanese carmakers such as Toyota (7203.T) , opens new tab and Honda (7267.T) , opens new tab, as well as dominant Chinese EV brands. The other risk is to the vital tourism sector, already grappling with a 7% year-on-year fall in foreign arrivals. Theinprasit Chaiyapatranun, president of the Thai Hotels Association, said that a stronger baht hadn't significantly impacted hotel bookings or the broader tourism sector so far, but that could change. "If the baht remains strong for an extended period - such as continuing into next year - there will likely be an impact," he said. The baht's rally comes during a change of guard in government and also at the Bank of Thailand. Outgoing central bank governor Sethaput Suthiwartnarueput said on Tuesday that discussions are now underway to find and deploy measures to counter the currency's strength. Prime Minister Anutin, whose cabinet is yet to take charge, has also said he will tackle the baht's appreciation. "The prime minister is listening," said Nava of the Federation of Thai Industries. "We don't want to see the government interfere with the central bank, but find a way for better coordination." https://www.reuters.com/world/asia-pacific/thailands-strong-baht-threatens-exports-tourism-amid-global-headwinds-2025-09-17/

2025-09-17 08:49

LONDON, Sept 17 (Reuters) - Average house prices in the United Kingdom in July were 2.8% higher than a year earlier, down from a 3.6% rise in the year to June, the Office for National Statistics said on Wednesday. Growth in property prices slowed sharply after hitting a two-year high in March when buyers rushed to complete sales before an expiry of a tax break on many house purchases. Sign up here. Private-sector rental growth slowed to 5.7% in the 12 months to August from 5.9% in July, the ONS added, and the smallest annual increase since December 2022. https://www.reuters.com/world/uk/uk-house-prices-rise-28-12-months-july-2025-09-17/

2025-09-17 07:52

JAKARTA, Sept 17 (Reuters) - Indonesia's central bank delivered another surprise interest rate cut on Wednesday, its sixth cut since it kicked off an easing cycle in September last year, saying economic growth needed to be strengthened. Bank Indonesia trimmed the benchmark 7-day reverse repurchase rate (IDCBRR=ECI) , opens new tab by 25 basis points to 4.75%, the lowest since late 2022. All 31 economists surveyed by Reuters had expected no change. Sign up here. The bank also cut its overnight deposit facility rate (IDCBID=ECI) , opens new tab by 50 basis points and its lending facility (IDCBIL=ECI) , opens new tab rate by 25 basis points to 3.75% and 5.50%, respectively. Governor Perry Warjiyo reiterated at Wednesday's press conference that BI would continue to assess the room for further cuts in an effort to lift economic growth. BI has had to balance the need to keep the rupiah currency stable and the need to support growth during the easing cycle. BI has now cut its main interest rate by a total of 150 basis points since September last year. Markets have been unsettled by two weeks of protests and unrest across many cities from late August and then last week's abrupt sacking of respected finance minister Sri Mulyani Indrawati. There have also been concerns about the central bank's independence following a "" deal that will see BI help fund state programmes. And parliament is discussing changes that could strengthen the requirement for BI to support growth and allow parliament to evaluate board members and recommend their removal to the president. Southeast Asia's largest economy grew 5.1% in the second quarter from a year earlier, the fastest pace in two years, but new finance minister Purbaya Yudhi Sadewa has said there were signs of slowing in the third quarter. Earlier this week the government unveiled a stimulus package worth nearly $1 billion for the fourth quarter, including food handouts and an infrastructure building programme that could create some jobs. Purbaya last week criticised BI for keeping liquidity conditions too tight, and moved more than $12 billion of government funds from the central bank to commercial banks to be used for loans. Warjiyo emphasised on Wednesday that the banking system has ample liquidity to support loan distribution and economic growth, and urged banks to lower their interest rates. https://www.reuters.com/world/asia-pacific/indonesia-central-bank-delivers-surprise-rate-cut-boost-growth-2025-09-17/

2025-09-17 07:46

JAKARTA, Sept 17 (Reuters) - Indonesia's central bank delivered another surprise interest rate cut on Wednesday, its sixth cut since it kicked off an easing cycle in September last year, as it looks to stimulate demand while inflation is low. Bank Indonesia trimmed the benchmark 7-day reverse repurchase rate (IDCBRR=ECI) , opens new tab by 25 basis points to 4.75%, the lowest since late 2022. All 31 economists surveyed by Reuters had expected no change. Sign up here. The bank also cut its overnight deposit facility rate (IDCBID=ECI) , opens new tab by 50 basis points and its lending facility (IDCBIL=ECI) , opens new tab rate by 25 basis points to 3.75% and 5.50%, respectively. https://www.reuters.com/world/asia-pacific/indonesian-central-bank-delivers-surprise-rate-cut-2025-09-17/