JAKARTA - INDONESIA'S central bank cut its key interest rate by half a percentage point on Wednesday in a bid to stimulate growth amid global recession and easing inflationary pressures.

Bank Indonesia (BI) cut its benchmark rate by a higher-than-expected 50 basis points to 8.75 per cent, officials said.

'Inflationary pressures continued to ease in recent months as a result of falling commodity and energy prices,' BI Governor Boediono told Dow Jones Newswires.

Most analysts polled by Dow Jones had expected BI to cut the rate by 25 basis points.

The year-on-year inflation rate slowed to 11.06 per cent in December from 11.68 per cent in November following a cut in retail fuel prices. -- AFP