Bank Indonesia says new bank loans increasing

Bank Indonesia says new bank loans increasing

The Jakarta Post, Jakarta

Bank Indonesia reported on Thursday that the intermediary role of
the country's banking sector was steadily improving, with Rp 3.3
trillion (about US$365 million)-worth of new loans distributed
during October.

The October volume brought the total loan exposure from local
banks during the January to October period to Rp 63.6 trillion,
or some 40 percent higher than for the same period last year, the
report said.

Of the new loans, some Rp 2.3 trillion has been distributed to
businesses categorized as small and medium enterprises (SMEs).

The report cited falling central bank interest rates, a stable
rupiah and relatively manageable inflation as the reasons behind
the rise in new bank lending.

Consequently, in November, Bank Indonesia concluded that the
overall economic and monetary condition in the country was
heading for improvement.

In fact, the rupiah, feared to be the hardest hit by the
recent Bali attack, strengthened in November by 2.6 percent to Rp
8,978 per U.S. dollar, compared with October.

November's on-year inflation, stated to be 1.85 percent,
brought the total figure in the first eleven months of the year
to 8.72 percent.

The central bank hoped that the currently improving monetary
situation would continue next year, a prerequisite if the country
was to continue its economic recovery.

BI predicted next year the economy to grow within the range
3.5 percent to 4.0 percent.