Banks committed to lower lending rate: BI<\/p>\n
The Jakarta Post, Jakarta\/Makassar<\/p>\n
Bank Indonesia senior deputy governor Anwar Nasution said on
\nFriday that the country's commercial banks were now committed to
\nlowering their high lending rates to make loans more affordable
\nfor the corporate sector.<\/p>\n
He said that the commitment was made during a meeting on
\nThursday evening between bankers and the central bank. The
\nmeeting was also attended by Minister of Finance Boediono and
\nCoordinating Minister for People's Welfare Jusuf Kalla.<\/p>\n
Anwar said that a special team had been set up to analyze the
\nproblems that had been preventing banks from cutting down rates,
\nand added that the team would file its report next week.<\/p>\n
\"There's a commitment from them to lower lending rates,\" Anwar
\nwas quoted by detik.com as saying.<\/p>\n
Separately, Jusuf said in Makassar, South Sulawesi, that the
\ngovernment and the central bank was hoping the lending rates
\ncould decline to between 15-16 percent by August.<\/p>\n
\"Last night (Thursday), we agreed that the (lending) rates
\ncould be lowered to 15-16 percent,\" he told reporters.<\/p>\n
He added that the favorable lending rate for the business
\nsector was actually around 12 percent.<\/p>\n
The central bank has gradually cut down its benchmark interest
\nrate over the past year, hoping to push banks to also cut down
\ntheir lending rates so that the corporate sector could expand
\ntheir business activities, which in turn would help accelerate
\nthe country's economic recovery. But although the interest rate
\non one-month Bank Indonesia SBI promissory notes had declined to
\na six-year low of 9.30 percent from over 13 percent earlier this
\nyear, lending rates remained stubbornly high at 17 to 18 percent.<\/p>\n
Some bankers said previously that they had to maintain higher
\nlending rates to compensate for lower revenues obtained from
\ngovernment bank recapitalization bonds they held onto amid the
\ndeclining SBI rate. The interest rate of some of these bonds is
\nlinked to the SBI rate. They also argued that channeling loans to
\nthe corporate sector are still considered risky, as many
\ncompanies were saddled with huge bad debts.<\/p>\n
But Anwar said that there were now signs that banks were
\nstarting to lower their lending rates, with the giant Bank
\nMandiri having recently cut down its rate to 16 percent, and Bank
\nBNI to 17 percent.<\/p>\n
\"This is good progress,\" he said.<\/p>\n
He hoped that the move would be followed by other banks.<\/p>\n
He, however, said that the government must also play its role
\nto further improve the investment climate and accelerate the
\nrestructuring of the country's corporate sector.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/banks-committed-to-lower-lending-rate-bi-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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