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