OJK Confident that the Trend of Declining Lending Rates Will Continue
OJK Banking Supervisory Executive Head Dian Ediana Rae is confident that the trend of declining bank lending rates will continue. This aligns with the reduction in benchmark interest rates and the improving funding structure of the national banking industry.
Based on the latest OJK data, the average rupiah lending rate in March 2026 was recorded at 8.76 per cent, down from 8.80 per cent in February 2026. The figure is also lower than March last year at 9.20 per cent.
“The decline in lending rates has mainly occurred in productive credit, both working capital credit and investment credit, in line with the decrease in funding costs and the BI Rate reduction policy over the past year,” said Dian in an official statement on Friday, 8 May 2026.
The reduction in Bank Indonesia’s benchmark rate, or BI Rate, is seen as a factor driving down lending rates. The BI Rate fell from 5.75 per cent in March 2025 to 4.75 per cent in March 2026, encouraging the weighted average third-party funds (DPK) rate in banking to drop to 2.66 per cent.
Dian explained that the transmission of the BI Rate reduction to lending rates generally requires a certain time lag. “Therefore, lending rates are expected to remain in a downward trend,” she stated.
Nevertheless, adjustments to lending rates at each bank will heavily depend on their business strategies and funding cost structures or cost of funds (CoF). OJK continues to urge banks to gradually adjust lending rates while considering market conditions and maintaining healthy financial ratios.
OJK assesses that despite volatile global and domestic economic dynamics, the liquidity position of the national banking sector remains sufficient to support financing to the real sector. Furthermore, Dian conveyed that future bank credit growth will still be influenced by economic conditions and the investment climate.
Overall, bank credit in March 2026 totalled Rp8,659 trillion, or grew 9.49 per cent compared to the same period the previous year (yoy). This growth was driven by investment credit, which expanded by 20.85 per cent yoy, followed by consumer credit at 5.88 per cent yoy. Meanwhile, working capital credit grew 4.38 per cent yoy.