Indonesian authorities have downgraded their eruption warning for rumbling Bali volcano Mt Agung after a decrease in seismic activity. The alert was  boosted to the highest threat level more than a month ago amid fears an eruption was imminent. The volcano’s rumblings as magma pushed towards the surface caused a massive downturn in Bali’s crucial tourism industry as travel insurance companies withdrew coverage for an eruption. Reports put the loss to the island’s economy as high as 2 trillion Rupiah ($US147m). Indonesia’s Center for Volcanolgy and Geological Hazards announced on Sunday that it was downgrading the alert from level IV to level III, or from dangerous to high alert, after 38 days at the higher level. The Volcano Observatory Notice for Aviation (VONA) was at yellow on Monday, indicating a significant decrease in activity but that the volcano continued to be closely monitored. It had previously reached the second highest level, orange. While experts cautioned there was still a chance the volcano could erupt,  the head of the volcanology centre, Kasbani, said there had been a fall in seismic activity after October 20. Kasbani said the activity had dropped dramatically in the first three days and slowly declined thereafter. GPS data showing the deformation of the volcano indicated a slowdown and satellite data had shown  “a decrease in thermal energy”. Drones were also used Sunday to make visual observations of the crater and this showed that gas activity had decreased since October 20. “Thermally and visually, data consistently shows a decline, so we declare the status down," he said. Authorities also reduced the exclusion zone for the volcano from 12km to 7.5km and, in some cases,  from 9km to 6km. More than 130,000 people evacuated from the immediate danger zone have been housed in refugee camps around Bali and many will now be able to return home. Mt Agung’s last major eruption was in 1963 and killed more than 1100 people. That eruption lasted for more than a year.