LPS Coordinates with Banks to Align Deposit Rates with Guarantee Rate

The Indonesia Deposit Insurance Corporation (LPS) is continuously coordinating with the banking industry to adjust deposit interest rates to align with the deposit guarantee rate (TBP), according to LPS Chairman of the Board of Commissioners Anggito Abimanyu. Speaking after a limited meeting at the Presidential Palace Complex in Jakarta on Monday evening, Anggito noted that around 30 percent of deposit interest rates in the market are currently above the TBP. “What is happening is that market interest rates are generally above the TBP, around 30 percent. But we are always coordinating so that over time they are lowered, so that as much as possible market rates are guaranteed by the LPS,” Anggito said. He stated that the LPS currently sets the TBP at 3.75 percent for rupiah deposits in commercial banks, taking into account prevailing market interest rate developments. On the occasion, Anggito also confirmed that public savings are still growing, refuting the notion that many people are experiencing the phenomenon of ‘eating into their savings’ or using their deposits for daily needs. “Everything is still growing, both savings below Rp100 million and those up to above Rp5 billion. Everything is growing and moving,” Anggito said. This growth indicates that the circulation of funds entering banks is supporting real sector economic activities.