OJK: Lending Rates Continue to Decline Alongside Stabilising BI Rate

The Financial Services Authority (OJK) continues to closely monitor the transmission of Bank Indonesia’s (BI) benchmark rate reductions to banking credit rates. Amid the decision to maintain the BI Rate at 4.75 per cent in April 2026, OJK assesses that the downward trend in credit interest rates is still ongoing.

Dian Ediana Rae, OJK’s Executive Head of Banking Supervision, stated that the weighted average interest rate for Rupiah-denominated credit was recorded at 8.76 per cent in March 2026. “OJK is constantly monitoring the ongoing downward trend in credit interest rates,” Dian noted in a written response during the OJK Monthly Board of Commissioners Meeting.

According to her, the decrease in credit rates is primarily occurring in productive loans, including both Working Capital Loans and Investment Loans. This trend is considered in line with the reduction in funding costs and the BI Rate reduction policy over the past year.

Dian explained that the reduction of the BI Rate from 5.75 per cent in March 2025 to 4.75 per cent in March 2026 has also influenced the movement of Rupiah-denominated third-party fund (DPK) interest rates. OJK noted that the weighted average interest rate for Rupiah DPK fell to 2.66 per cent.

Dian noted that there is a specific time lag before the reduction in the benchmark rate is fully reflected in the credit rates applied by banks to customers. “It should be noted that the transmission of the BI Rate reduction to credit interest rates requires a certain period of time,” she said. Consequently, OJK expects credit interest rates to continue adjusting in accordance with the direction of the BI Rate.