'The effect will be temporary'

In a move to stabilize the rupiah, Bank Indonesia has decided to increase its benchmark interest rate (on Tuesday to 10 percent). The decision will affect people who have to repay bank loans. The Jakarta Post asked some residents how they were dealing with the interest rate hike.

Amel Kirana, 29, works at a private bank. She lives in South Jakarta:

The interest rate hike came at a very unfortunate time for me. I had just taken out a loan for a house. I thought that it was going to be a long-term investment, but with the hike, the bank can now put up its interest rate for the monthly installments.

Currently, I spend a third of what I make to repay the debt. Luckily, I am still single. I do not know when my bank will raise the interest, but I guess not long after this.

Perhaps the raise will help boost our nation's monetary condition, but most people are afraid that the effect will only be temporary. For example, the bank that I work for is more careful in giving out loans now. However, that will probably only last for a few months as banks sort of depend on lending.

Emen Suhaimin, 57, a small-scale entrepreneur who lives in Kemanggisan, West Jakarta:

Three years ago I took out a loan for Rp 20 million from a private bank to expand my business. At that time, it was not difficult to pay back as the interest rate and business were still good.

Now these days, business is decreasing and with the interest rate going up, it is going to be more difficult for me to manage my finances. I still have two more years to repay the loan.

I just hope that our economy gets better, and both interest rates and businesses will be back to where they were before. These kinds of problems make it difficult for our small businesses to grow.

-- The Jakarta Post