Governor of Bank Indonesia Asks Regional And Private Banks To Lower Lending Rates: To Boost The Economy!

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

JAKARTA - Governor of Bank Indonesia (BI) Perry Warjiyo asked the Regional Development Bank (BPD) and national private banks to immediately lower the lending rate following the central bank's cut in the benchmark interest rate.

"Now there are only BPD and other private banks. Let's lower interest rates so that we continue to boost our economy", he said in the event 'Sarahsehan Akselerasi Pemulihan Ekonomi Nasional', Friday, April 9.

Furthermore, Perry said, the move is necessary to boost the national economic recovery affected by the COVID-19 pandemic. He said that currently the Association of State-Owned Banks already reduced the interest rate on loans.

Perry said that BI throughout 2020 has lowered the benchmark interest rate or BI 7-Day Reverse Repo Rate (BI7DRR) by 125 basis points, even in March 2021 it is already at the level of 3.50 percent.

"Thank you to the Association of State Owned Banks who has followed BI's steps to lower the lending rate. Unabashedly, the SBDK (Basic Lending Rate) of Himbara banks immediately dropped from 10 percent to 8.7 percent", he said.

To support further national economic recovery, Perry said, Bank Indonesia has also optimized accommodative macroprudential policy, accelerated money market deepening, international policy support, and digitized payment system.

Bank Indonesia has also loosened other macroprudential by issuing a zero percent down payment (DP) policy for automotive loans and a 100 percent Loan to Value (LTV) ratio for property loans. This is so that banks are enthusiastic about channeling credit.

"After the Minister of Finance issued a fiscal policy to encourage automotive and property loans, Mr. Wimboh also encouraged, and we also down payment zero percent, thank God property loans have started to rise", he said.

Perry said that Bank Indonesia will also continue to strengthen policy coordination with the Government and the Financial System Stability Committee (KSSK), including the implementation of the KSSK Integrated Policy Package, to accelerate lending/financing from banks to businesses in priority sectors that support economic growth to restore the national economy.