Lower interest rates!
Lower interest rates!
From Bisnis Indonesia
As the exchange rate of the U.S. dollar against the rupiah is
now under Rp 10,600 to the dollar -- the level set as a target by
the IMF and the government in the current state budget -- as a
businessman, I hope that bank interest rates may be lowered again
a little sooner.
I propose this further lowering of bank rates in order that
constraints to the revival of economic activities in the real
sector may be reduced, so that the activities of producing and
distributing goods may run well again. Reviving production and
distribution activities is important to curb the inflation rate
and open up employment and business opportunities, particularly
with respect to people in the lower income brackets.
Efforts to revive economic activities will be very much
hampered if bank rates remain at too high a level.
Also, keeping bank rates too high will be unfavorable for
banks, particularly those sustaining liquidity difficulty and
continuous losses in what is known as the negative spread.
Therefore, it would be wise if Bank Indonesia its SBI interest
rate sooner, so that commercial banks are not in a race to raise
their interest rates, which are now ranging from 46 percent for
time-deposit rates to 65 percent for loan interest rates.
On the other hand, loans extended on the basis of government-
sponsored programs, with an interest rate of 16 percent, should
continue to be facilitated, and their disbursement should also be
sped up so that our economic revival will happen immediately. In
this context, medium enterprises, particularly those which are
export-oriented and in support of export activities, must be
allocated these loans.
And one more thing, demonstrations must be staged in a more
orderly manner and should not involve vandalizing any buildings
or public facilities. Aren't we a peace-loving nation?
Unless economic activities can be revived, the number of
criminals will be on an increase, in line with the rise in the
number of unemployed people.
A. WIBOWO
Jakarta