OJK States Bank Lending Rates Continue to Decline

JAKARTA - The Financial Services Authority (OJK) assesses that the trend of declining bank lending interest rates will continue. This is in line with the decline in benchmark interest rates and the improving funding structure of the national banking industry. OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, stated that the weighted average rupiah lending interest rate in March 2026 was recorded at 8.76%. “The decline in lending interest rates has mainly occurred in productive credits, both working capital loans and investment loans, in line with the decrease in funding costs and the policy of lowering the BI Rate over the past year,” said Dian in a press release on Friday (8/5/2026). According to Dian, the decline in lending interest rates is inseparable from Bank Indonesia’s policy of continuously lowering its benchmark interest rate over the past year. She explained that the BI Rate fell from 5.75% in March 2025 to 4.75% in March 2026. This decline has also driven down the weighted average third-party funds (DPK) rupiah interest rate to 2.66%. Nevertheless, OJK emphasises that adjustments to lending interest rates at each bank will greatly depend on the business strategy and funding cost structure (CoF) of each bank. “OJK continues to urge banks to gradually adjust lending interest rates while still paying attention to market conditions and maintaining healthy financial ratios,” she said. Amid this trend of declining lending interest rates, OJK assesses that the liquidity condition of the national banking sector remains adequate to support financing distribution to the real sector. Furthermore, she 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 of economic growth is maintained and healthy and productive credit distribution can continue,” said Dian. OJK also views the prospects of the domestic economy as still in an optimistic zone. This is reflected in the Consumer Confidence Index (IKK) of 122.89 in March 2026 and Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) remaining at an expansive level of 50.1.