JAKARTA - Governor of Bank Indonesia (BI) Perry Warjiyo, highlighted the slow decline in lending rates by the banking sector where in July 2025, credit interest rates were recorded at 9.16 percent, barely changing compared to the previous month.
"The decline in bank credit interest rates is still slow. In July 2025, credit interest rates were recorded at 9.16 percent, still relatively the same as the previous month," Perry said in a virtual press conference, Wednesday, August 20.
He conveyed that since the beginning of 2025, BI has lowered the benchmark interest rate four times, each at 25 basis points (bps), so that it is now at the level of 5 percent.
Perry said that the banking sector needed to immediately adjust lending rates to encourage increased financing which in the end could strengthen economic growth.
As for now, credit growth has slowed to 7.03 percent (yoy) in July 2025, from the previous 7.77 percent (yoy) in June 2025.
"In terms of supply, in the midst of lowering monetary interest rates, easing liquidity, and incentives for macroprudential policies taken by BI, banking behavior tends to be careful in disbursing credit, including being reflected in the increased lending standards," he said.
He added that banks prefer to place excess liquidity in securities instruments.
On the other hand, this loose liquidity condition was supported by the growth of the Third Party Fund (DPK) by 7 percent (yoy) in July 2025, in line with the government's fiscal expansion.
Meanwhile, in terms of demand, credit increase is still driven by export-oriented sectors such as mining, plantations, as well as the transportation, industrial, and social services sectors. However, in general, demand for financing from the business world is still weak because business actors tend to rely on internal funds.
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Based on the type of use, consumption credit and working capital credit growth are still not significant, each growing only 8.11 percent (yoy) and 3.08 percent (yoy).
Meanwhile, investment credit showed a higher growth of 12.42 percent (yoy), while Islamic financing grew 8.31 percent (yoy). Meanwhile, credit for MSMEs is still growing low, only 1.82 percent (yoy).
"In the future, BI will continue to encourage lending or bank financing, including through loose macroprudential policies and strengthening coordination with KSSK. Overall, BI estimates that bank credit growth in 2025 will be in the range of 8-11 percent," he said.
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