Banking Credit Still Grows Dobel Digit Even Though There Is A Slowdown

Illustration (Photo: Doc. Antara)

JAKARTA Bank Indonesia (BI) revealed that bank credit growth in January 2023 reached 10.5 percent year on year (yoy).

BI Governor Perry Warjiyo said that this figure was more gentle when compared to December 2022 which grew 11.3 percent.

"This happened due to the influence of seasonal patterns (natal and New Year). In general, banking intermediation in early 2023 continued to grow high," he told the media crew after the Board of Governors' Meeting (RDG), quoted by the editors on Friday, February 17.

Perry explained, for the Islamic banking sector, financing grew higher to reach 20.9 percent yoy in January 2023.

Then, in the MSME segment, credit growth also continues, especially the distribution of People's Business Credit (KUR) grew by 29.6 percent yoy during 2022.

"The high credit and financing is driven by an offering side supported by adequate liquidity and bank lending standards that remain loose," said Perry.

The BI boss added that in terms of demand, there was an increase in credit/financing supported by corporate demand including MSMEs and household consumption which continued to improve.

"Bank Indonesia will continue to encourage banks to increase intermediation to support economic recovery," he said.

On this occasion Perry also said that the central bank decided to maintain the BI benchmark interest rate of the 7 days repo rate of 5.75 percent.

Likewise, the deposit facility interest rate has not changed at the level of 5 percent percent and the lending facility rate at 6.50 percent.

"This decision remains consistent with pre-emptive monetary policy and forward looking to ensure the continued decline in inflation expectations," he said.