JAKARTA Bank Indonesia said that the policy of expanding funding through increasing the National Funding Ratio (RPLN), which will take effect on June 1, 2025, is expected to start having an impact on economic growth no later than the next one year.
Head of the Macroprudential Policy Department (DKMP) of Bank Indonsia Solikin M. Juhro said that the effect on the macro sector will usually only be felt within about 1.2 years.
"The impact of the RPLN was as I said earlier, yes, about 1-2 years is for macro," he said in a Media Taklimat: Accommodative Macroprudential Policy to Support Sustainable Economic Growth, Monday, May 26.
However, he said that the direct impact (imediat) of the RPLN policy had actually begun to be seen, especially in the banking sector.
Therefore, he hopes that this policy can encourage increased banking funding from abroad, thereby strengthening lending and encouraging higher economic growth.
According to him, many parties will take advantage of this opportunity because the RPLN in question is not included in the calculation of the ratio or is not categorized as short-term foreign debt, so it does not increase the risk burden as usual.
"Now a lot of it is taking advantage of, okay, it turns out that this is okay, not included in the ratio, he is not included in the definition that is considered a short-term foreign debt, yes, he understands," he explained.
Basically, easing funding provisions through increasing the Overseas Funding Ratio (RPLN) from a maximum of 30 percent to 35 percent of bank capital provides space for banks to improve liquidity and expand credit disbursement capacity.
In addition, strengthening the implementation of the RPLN policy aims to increase access to bank funding from abroad according to economic needs, but still prioritizes the principle of prudence. This is done through the application of contradicial parameters that allow an additional RPLN of 5 percent.
Furthermore, Solikin said that the transmission from the benchmark interest rate to the credit interest rate for about 6 months, to the money market could occur sooner, about 2 3 months, to the interest rate it will take about 6 months, while the impact on the real sector (economic) as a whole will only be felt about 1.5 years later.
"So it's like that, more or less, depending on where, but if the money market interest rate can be instantaneous, because the BI Rate is the lowest tenor, yes, the lowest tenor, then if we talk about short-term tenors, it can be immediately faster," he said.
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Solikin said that Bank Indonesia also continues to encourage transparency through the publication of the Basic Credit Interest Rate (SBDK), because it allows the public and market participants to understand the tendency of interest rate determination strategies by each bank.
According to him, this provides an overview of how the basic interest rate is determined and how its movement reflects the direction of bank policy in general.
"We have transparency of the basic lending interest tribe, yes, then this is necessary, it needs to be observed too, yes, it is done by many friends, it can be made to learn, how we provide transparency of the basic interest rate, so that you know, where is the tendency of banks, that's it. With that, it indirectly provides a term, the term of interest rate is like this," he said.
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