Banks In Indonesia Should Be Fair To Immediately Lower KPR Interest Rates

Illustration. (Photo: Bank BTN)

JAKARTA - Bank Indonesia (BI) has again lowered its benchmark interest rate for the 7-Day Reverse Repo Rate by 25 basis points to 4 percent, where it was previously at the level of 4.25 percent. With the decrease in interest rates, it is hoped that it will provide hope for players, especially in the property sector, to reduce interest expenses so far. It also includes the hope for the public to be able to enjoy lower Home Ownership Credit (KPR) interest so that purchasing power will be more secure.

However, this benchmark interest has become almost useless after several reductions have been made. Banking mortgage interest rates are still quite high and there is no sign of a significant decline.

"Banks should be able to prioritize fairness by also lowering their interest rates. Because all this time the decline in the BI 7-Day Reverse Repo Rate has not always been followed by a reduction in bank interest rates," said Ali Tranghanda, CEO of Indonesia Property Watch in a statement received by VOI. , Thursday 23 July.

According to Ali, this is very unfortunate because what happened was that the mortgage interest rates were still quite high, ranging from 9 percent to 10 percent. Several banks have actually implemented lower promo rates with a fixed rate of only 1 or 2 years, but their respective reference rates are still high.

"Apart from that, some developers also provide interest subsidies so that the KPR interest rate looks low. But in reality it is not the real interest rate," Ali explained.

Almost the same also happened to construction loan interest. Developers who have collaborated with banks when interest rates are high, have not been given an automatic interest rate reduction policy.

"Many developers with loan interest rates of 11.5 percent to 12.5 percent are currently unable to enjoy the trend of cheap interest rates. Moreover, if you see that the spread is quite high compared to the current BI benchmark rate of 8.5 percent," said Ali .

Therefore, Indonesia Property Watch asks all parties to be responsive to the current situation. Developers should not be used as objects because currently most of them are affected by the COVID-19 pandemic and it will be even more severe when interest rates remain high.

We hope that Bank Indonesia and OJK can give a warning to the banks to also lower their interest rates. Or even a little force. Because with the current conditions the impact will be enormous if it is not followed by a reduction in bank interest rates, "said Ali.