OJK: Decline in Lending Rates Continues Alongside BI-Rate
Jakarta (ANTARA) - The Financial Services Authority (OJK) views the trend of declining bank lending rates as continuing alongside the reduction in the reference interest rate (BI-Rate) throughout the previous year, as well as the improving funding structure of the national banking industry.
In March 2026, the weighted average rupiah lending rate was recorded at 8.76 per cent, down 44 basis points from the March 2025 position of 9.20 per cent.
OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, stated in Jakarta on Friday that the decline in lending rates has primarily occurred in productive loans, both working capital and investment loans, in line with the decrease in funding costs and the BI-Rate reduction policy over the past year.
She added that the BI-Rate drop from 5.75 per cent in March 2025 to 4.75 per cent in March 2026 has also driven the weighted average third-party funds (DPK) rupiah rate down to 2.66 per cent.
In general, Dian explained, the transmission of the BI-Rate reduction to lending rates requires a certain time lag. Therefore, lending rates are expected to remain on a downward trend.
However, she stressed that adjustments to lending rates at each bank will depend heavily on the business strategies and cost of funds (CoF) structures of individual banks.
“OJK continues to urge banks to gradually adjust lending rates while still considering market conditions and maintaining healthy financial ratios,” said Dian.
Amid this downward trend in interest rates, OJK assesses that the liquidity position of the national banking sector remains adequate to support financing for the real sector, even as global and domestic economic dynamics continue to evolve.
Furthermore, Dian conveyed that future bank credit growth will still be influenced by economic conditions and the investment climate.
“Synergy between the government, regulators, and all stakeholders needs to be continuously strengthened so that the momentum for economic growth is maintained and healthy, productive credit disbursement can continue,” said Dian.
On the other hand, the domestic economic outlook remains in the optimistic zone. This is reflected in the March 2026 Consumer Confidence Index (IKK) of 122.89 and Indonesia’s Manufacturing PMI remaining expansionary at 50.1.
“These indicators show that household consumption and national manufacturing activity are still well-maintained, thereby supporting future bank credit growth,” said Dian.
In facing global economic volatility and rupiah depreciation, Dian stated that OJK will tighten supervision of each individual bank and sharpen analysis of potential risks to banks.
OJK also asks banks to continue strengthening risk mitigation through the implementation of stress tests with various scenarios.
“Banks need to conduct early risk identification and prepare appropriate and measured mitigation steps,” said Dian.
Meanwhile, the banking sector’s undisbursed loan position in March 2026 was recorded at Rp2,527.46 trillion, up 7.35 per cent from Rp2,354.50 trillion in March 2025.
Undisbursed loans are loan facilities approved by banks but not yet drawn down by debtors, for reasons such as business cycle considerations, project completion progress, or company cash flow management.
“Although nominally increasing, the percentage of undisbursed loans to total credit has decreased from 29.77 per cent to 29.19 per cent. This indicates that the national banking sector still has sufficient room to support productive financing and drive real sector growth,” said Dian.
According to her, undisbursed loans are expected to decline going forward in line with banking business strategy adjustments and increasing business optimism towards the national economic prospects.
Dian also expressed optimism that the national banking industry remains resilient in facing both global and domestic dynamics.
“With adequate liquidity, the downward trend in lending rates, and policy synergy between the government, regulators, and the financial services industry, banks are expected to continue strengthening their intermediation function in a healthy, prudent, and sustainable manner to support national economic growth,” Dian concluded.