Indonesia's central bank delivered its first rate cut in more than three years on Wednesday, just hours ahead of the widely expected start of the U.S. Federal Reserve's easing cycle in efforts to bolster growth in Southeast Asia's largest economy.

Bank Indonesia’s surprise interest-rate cut may lead to higher foreign inflows into bonds and stocks, which may end up supporting the rupiah, according to analysts.

BENGALURU (Reuters) - Bank Indonesia (BI) will leave interest rates unchanged next week to support the rupiah but was expected to cut next quarter, after widely anticipated policy loosening by the U.S. Federal Reserve on Sept. 18, a Reuters poll found.

Indonesia's central bank surprised markets by delivering its first rate cut in more than three years on Wednesday, moving to bolster growth in Southeast Asia's largest economy ahead of the start of an expected easing cycle in the United States.

Indonesia’s central bank is approaching the point where it can start easing borrowing costs as the rupiah keeps strengthening and inflation stays modest. Most economists aren’t convinced that it will happen this week though,

Bank Indonesia has joined the growing ranks of central banks that are lowering rates, delivering a cut on the cusp of a Federal Reserve meeting that could start the easing cycle in the U.S.