OJK Reveals: Bank Lending Rates Have Already Fallen by This Much
The trend of declining bank lending interest rates is expected to continue. The Financial Services Authority (OJK) states that this is occurring alongside the reduction in the benchmark interest rate and the improving funding structure of the national banking industry.
OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, said the weighted average rupiah lending rate in March 2026 was recorded at 8.76%, down from 8.8% in February 2026 and 9.20% in March 2025.
“The decline in lending rates has mainly occurred in productive credit, both working capital and investment credit, in line with the decrease in funding costs and the policy of lowering the BI Rate over the past year,” said Dian, quoted on Friday (8/5/2026).
Dian explained that the BI Rate reduction from 5.75% in March 2025 to 4.75% in March 2026 has also driven the weighted average third-party funds (DPK) rupiah rate down to 2.66%.
“In general, 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,” said Dian.
However, Dian emphasised that adjustments to lending rates at each bank will greatly depend on each bank’s business strategy and cost of funds (CoF) structure. Accordingly, OJK urges banks to gradually adjust lending rate levels while still considering market conditions and maintaining healthy financial ratios.
Amid this downward trend in interest rates, OJK assesses that the national banking liquidity position 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. She added that synergy among the government, regulators, and all stakeholders needs to be continuously strengthened to maintain the momentum of economic growth and ensure healthy and productive credit distribution continues.
On the other hand, the domestic economic outlook remains in the optimistic zone. This is reflected in the Consumer Confidence Index (IKK) of 122.89 in March 2026 and Indonesia’s Manufacturing PMI remaining expansive at 50.1.
“These indicators show that household consumption and national manufacturing activity remain well-maintained, thus 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.
Meanwhile, the banking sector’s undisbursed loan position in March 2026 was recorded at Rp2,527.46 trillion, up 7.35% from Rp2,354.50 trillion in March 2025.
Undisbursed loans refer to loan facilities approved by banks but not yet drawn down by debtors, for reasons such as business cycle considerations, project completion progress, or corporate cash flow management.
“Although nominally increasing, the percentage of undisbursed loans to total credit has decreased from 29.77% to 29.19%. This indicates that the national banking sector still has sufficient room to support productive financing and drive real sector growth,” she explained.
According to Dian, undisbursed loans are expected to decline going forward in line with banking business strategy adjustments and increasing business optimism towards the national economic outlook. She is optimistic that the national banking industry remains strongly 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.