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 (%)

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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