BI Provides Liquidity Incentives For Topang Credit Growth

Governor of Bank Indonesia Perry Warjiyo. (Photo: Doc. ANTARA)

JAKARTA - Bank Indonesia (BI) Governor Perry Warjiyo said banking liquidity is still adequate to be supported by accommodative macroprudential policies, including the implementation of Macroprudential Liquidity Incentive Policy (KLM) to strengthen banking lending capacity.

Perry said that the total additional liquidity of the KLM incentives reached IDR 163.3 trillion as of December 2023 or an increase of IDR 55 trillion since the implementation of the KLM on October 1, 2023.

"The development of liquidity has a positive impact on banking interest rates, with deposit rates of 1 month and credit interest rates in November 2023 maintained, at 4.46 percent and 9.29 percent, respectively," he said at a press conference, Thursday, December 21.

In addition, Perry conveyed that adequate liquidity is also supported by the existence of Bank Indonesia Rupiah Securities (SRBI) which are traded on the secondary market so as to increase the flexibility of banks in managing liquidity and supporting the maintenance of banking lending capacity.

"Bank Indonesia will continue to increase the effectiveness of the implementation of KLM to encourage higher lending/financing of banks in sectors that have great leverage in order to support sustainable economic growth," he explained.

Meanwhile, the growth of third-party funds (DPK) for banks in Indonesia has slowed again as of November 2023.

BI explained that in November 2023 the DPK only grew 3.04 percent on an annual basis (yoy). This figure is lower than the previous month's 3.9 percent yoy.

As for November 2023, the ratio of Liquid Equipment to Third Party Funds (AL/DPK) was maintained high, which was 26.04 percent. Even though it fell compared to the previous month at 26.36 percent.