BI raises one-month time deposit rate to 56%

BI raises one-month time deposit rate to 56%

JAKARTA (JP): The maximum interest rate for one-month rupiah
time deposits this week is 56 percent, Bank Indonesia, the
central bank said at the weekend.

It said in a statement that it would not guarantee one-month
deposits offered at interest rates above that level during the
week.

BI has also set the interest rate ceilings for the various
rupiah and U.S. dollar time deposits, and on interbank overnight
rates for the week starting July 27.

It said that every Friday afternoon the bank would announce
the interest rate ceilings.

Based on BI's new ruling, announced early last month, the
interest rate ceiling for rupiah deposits in a week would be set
at 5 percent above the preceding weekly average of the Jakarta
Interbank Offered Rates (Jibor), BI said.

It added that the ceiling for US dollar deposits would be
fixed at 1 percent above the Jibor benchmark.

The maximum interest rate for the interbank overnight rates is
based on the weighted average of the overnight rates offered by
the banks' contributing to Jibor, the central bank said, adding
that BI would only guarantee principal payments and interest
rates at the ceiling.

In January the government promised to guarantee all banks'
obligations to allay fears of jittery depositors following the
closure of 16 banks in November and the dire state of many of the
country's banks. (rei)

Table: The maximum interest rates for July 27/Aug. 2

Time deposit Maximum rate Maximum rate

rupiah deposit (%) US dollar deposit (%)

-------------------------------------------------------

1-month 56 15

3-month 50 14

6-month 40 14

12-month 39 14

24-month 25 18

Maximum overnight rate for rupiah : 77 percent

Maximum overnight rate for U.S. dollars: 21 percent