30 Percent Market Interest Above LPS Guarantee Limit

JAKARTA - Around 30 percent of market interest rates are above the Bank Guarantee Rate (LPS) which is currently 3.75 percent. This condition makes some deposits at risk of not being covered by LPS guarantees.

Chairman of the LPS Anggito Abimanyu said his agency continued to monitor market interest rates and coordinate so that the banking interest rate could fall close to the guarantee limit.

"Market interest rates, on average, are above the TBP, around 30 percent," said Anggito at the Presidential Palace Complex, Jakarta, Monday, July 27.

According to Anggito, LPS sets the Guarantee Interest Rate based on the prevailing market interest rate. The amount is announced periodically and is one of the conditions for customer deposits to be guaranteed.

"Now 3.75 percent. We are trying to cover the existing market interest rates and continue to monitor it," he said.

Anggito said LPS continued to coordinate so that market interest rates above the guarantee limit could be lowered.

"As much as possible, the market interest rate is guaranteed by LPS," he said.

When asked about high interest rates at digital banks, Anggito emphasized that bank supervision is the authority of the Financial Services Authority. LPS only determines the interest rate of the guarantee and handles the process of resolution and liquidation of banks.

He did not explain which banks or savings groups offered the most interest above the guarantee limit.