SMGR Responds To The Impact Of Projection Of The Fed's Interest Rate Reduction

Director of Finance and Management of Portfolio SIG Andriano Hosny Panangian. (Photo: ANTARA)

JAKARTA - PT Semen Indonesia (Persero) Tbk (SMGR) or Semen Indonesia Group (SIG) has opened its voice regarding the potential reduction in Fed interest rates.

Just so you know, Jerome Powell's Federal Reserve (The Fed) chairman at Jackson Hole last week showed signs of a monetary easing at a meeting next September.

Director of Finance and Management of Portfolio SIG Andriano Hosny Panangian hopes that if later the Fed lowers interest rates, Bank Indonesia (BI) will do the same.

Moreover, he said, the retail market is a market that has an impact on the cement industry because around 70 percent of the cement industry revenue in Indonesia still has an impact on the retail market.

"Well, of course, if the Fed lowers interest rates and this will be followed by a decrease from the BI rate, it is also hoped that there will be a decrease in mortgage interest costs, interest costs for multi-purpose loans," he said in a Public Expose, Friday, August 30.

With this decrease, he bilan, it can have a multiplier effect on middle class households so that they can get facilities to renovate and purchase houses.

"So of course the decrease in the debt rate will have a positive impact on the cement industry," he said.

However, he ensured, the impact of this interest rate reduction will not affect the company's performance because adjustments and the application of this interest rate will only be carried out in the third quarter or fourth quarter of this year.

However, the impact of the Fed's decline in interest rates is predicted to not affect SMGR's performance this year. Because, it takes time for adjustments from the new decline to be made at the end of the third quarter of 2024.

"Because it will be carried out at the end of Q3 or Q4, of course this will not have an immediate impact on performance in 2024, it will definitely happen again which will have an impact of course in 2025," he concluded.