Markets view President Prabowo\u2019s speech and BI policy positively. The\nrise of the policy rate or BI Rate by 50 basis points to 5.25% is not\nyet yet driving banks to raise deposit or lending rates. The banking\nindustry still sees relatively loose liquidity, so room for policy\nadjustment remains open.<\/p>\n
Director of Branch Business Hana Bank, Hendri Setiawan, said Bank\nIndonesia\u2019s move to raise the BI Rate is understood as part of efforts\nto maintain stability of the rupiah\u2019s exchange rate, which has been\npressured by global dynamics.<\/p>\n
\u201cFrom what I see, this is related to our currency which has continued\nto rise. That is one of BI\u2019s instruments to guard the forex,\u201d Hendri\nsaid at Hana Bank\u2019s Media Gathering in Jakarta, Thursday (21\/5).<\/p>\n
According to him, theoretically a BI Rate increase is usually\nfollowed by adjustments in deposit rates because depositors tend to\ndemand higher returns. However, he sees the current conditions as\ndifferent because banking liquidity remains strong. He notes banks will\nnot automatically respond to the policy rate increase by lifting deposit\nrates because credit growth is still tepid.<\/p>\n
\u201cIf the cost of funds rises, of course credit rates will also rise.\nThat is the risk,\u201d he said.<\/p>\n
He explained that higher funding costs can ultimately affect the loan\ncosts borne by debtors. The situation, he added, could potentially\naffect credit demand, especially as purchasing power remains under\npressure. Nevertheless, Hana Bank says it has not yet seen liquidity or\ncredit disbursement problems. The company will continue to monitor\nmarket developments and customer behaviour in the short term before\ntaking further steps.<\/p>\n
\u201cWe will continue to see how customers and the market respond,\u201d he\nsaid.<\/p>\n
Hendri noted that monetary policy today also presents its own\nchallenges because, on the one hand, Bank Indonesia seeks to maintain\nmacroeconomic stability, while the government pushes for growth through\nincreased credit disbursement.<\/p>\n
He believes a balance between monetary stability and growth must be\nmaintained so that the economy\u2019s slowdown does not deepen further.<\/p>\n
Although various economic policies and the dynamics of the\ncommodities sector could affect business activity in the second quarter\nof this year, the banking sector remains optimistic about credit growth\nprospects.<\/p>\n
\u201cWe remain confident about credit developments this year. So far\nthere are no plans to revise targets,\u201d he concluded. (E-3)<\/p>\n
The Indonesian capital market is responding to BI\u2019s latest policy\nrate hike.<\/p>\n
The Fed holds rates at 3.5%-3.75%. Economists warn RI needs strong\nmonetary policy and fiscal discipline to sustain Rupiah stability.<\/p>\n
The IHSG closed down 2.16% to 7,378.61 as the rupiah breached\nRp17,300 per US dollar and global oil prices rose. Read full\nanalysis.<\/p>\n
Bank Indonesia held rates at 4.75% and strengthened market\nintervention to protect the rupiah amid global uncertainty and world\neconomic pressures.<\/p>\n
The IHSG today is expected to move variably as market participants\nremain cautious awaiting the direction of the central bank\u2019s policy\nrate.<\/p>\n
BI Governor Perry Warjiyo urged banks to improve efficiency so that\nlending rates can stay anchored even as the BI Rate rises to 5.25\npercent.<\/p>\n
KB Bank reported improved fundamentals in Q1-2026 supported by credit\ngrowth, stronger funding structure, and higher net interest margin.<\/p>\n
PT Bank Rakyat Indonesia (BRI) continues to drive sustainable\neconomic growth through disbursing Kredit Usaha Rakyat (KUR).<\/p>\n
BTN officially strengthens its credit growth engine through the Loan\nFactory, an integrated system designed to accelerate credit\ndisbursement.<\/p>\n
OJK notes that bank lending in February 2026 grew by 9.37% to Rp8,559\ntrillion year-on-year.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/rise-in-bi-rate-does-not-directly-slow-credit-growth-1779542682", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }