'The effect will be temporary'

'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