Loan utilization by real sector low: BI<\/p>\n
Berni K. Moestafa, The Jakarta Post, Jakarta<\/p>\n
Bank Indonesia said companies had absorbed only 40 percent of
\nthe loans provided by the banking sector, underscoring the
\nprivate sector's low investment capacity to stimulate economic
\ngrowth.<\/p>\n
Bank Indonesia Governor Sjahril Sabirin said on Friday that
\nhigh interest rates were unlikely the root of sluggish investment
\ngrowth in the real sector.<\/p>\n
\"If we look at our credit data, the credit ceiling is quite
\nhigh, but realization is slack, just about 40 percent on the
\naverage,\" he said.<\/p>\n
Earlier, several businessmen complained that Bank Indonesia's
\nhigh interest rates dried up their sources of funding.<\/p>\n
Banks, they said, were more eager to invest in Bank
\nIndonesia's promissory notes instead of channeling new loans.<\/p>\n
They said that to drive economic growth and create new jobs,
\nthe central bank must lower its rates to make loans affordable.<\/p>\n
But Sjahril argued that the low take-up of banks' loans
\nsuggested that industries were unable to find a profitable use
\nfor the funds.<\/p>\n
\"From the banking side of it, there is an earnest move to
\nprovide lending,\" he said.<\/p>\n
He added that bank's interest rates, if compared to the high
\ninflation rates, were in fact low.<\/p>\n
Bank Indonesia's promissory notes (SBIs) have been steadily
\nrising from about 11 percent since early this year. Over the last
\nfew months they have stabilized at more than 17 percent.<\/p>\n
That provides SBI investors or banks with an interest margin
\nof between 5 percent and 6 percent, with year-on-year inflation
\nrates at about 11 percent and higher since last March.<\/p>\n
Turning to the rupiah, Sjahril indicated that the central bank
\nmay lower its objective to reduce the currency's volatility
\ninstead of lifting it to a certain level.<\/p>\n
\"We'll try at least to prevent too much volatility, that's
\nall,\" he said, adding that the bank would continue to intervene
\nin the money markets if necessary.<\/p>\n
Earlier he said the rupiah's fundamental value should be about
\nRp 7,500 to Rp 8,000 to the U.S. dollar.<\/p>\n
On Friday, the local currency closed at Rp 10,253, just
\nslightly lower from Thursday's close at Rp 10,250.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/loan-utilization-by-real-sector-low-bi-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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