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.

The dollar dropped after the Federal Reserve on Wednesday cut interest rates by half a percentage point, citing greater confidence that inflation will continue to recede to the U.S. central bank's 2% annual target.

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.