LPS Again Maintains Commercial Bank Guarantee Interest Rate Of 3.5 Percent, Here's The Reason

Chairman of the LPS Board of Commissioners Purbaya Yudhi Sadewa. (Photo: ANTARA)

JAKARTA - The Deposit Insurance Corporation (LPS) in the Board of Commissioners' Meeting on Wednesday, May 25, 2022, decided to maintain the guarantee interest rate (TBP) for rupiah deposits for commercial banks at 3.5 percent and for Rural Banks (BPR) at six percent.

The interest rate for guaranteeing foreign exchange deposits (forex) for Commercial Banks was also maintained at 0.25 percent.

"Furthermore, the Guarantee Interest rate will apply for the period from May 28, 2022 to September 30, 2022," said Chairman of the LPS Board of Commissioners, Purbaya Yudhi Sadewa, in a virtual press conference, Wednesday, May 25.

Yudi explained that the consideration in determining the guarantee interest rate was because the deposit interest rate showed a slowdown in the midst of relatively loose banking liquidity conditions.

"The development of the rupiah deposit interest rate is limited to 2 basis points (bps) to 2.36 percent. Since the previous decline in 2021, the guarantee interest rate has fallen by 48 bps," Yudhi explained.

He added that the condition of banking liquidity was still relatively strong, supported by the steady growth of Third Party Funds (DPK).

Meanwhile, the level of capital and the intermediary function continues to show recovery.

"The growth performance of commercial banks shows a recovery trend. In April 2022, banking credit grew 9.3 percent year on year (yoy), while growth in deposits was high, which was 10.1 percent yoy," he said.

Meanwhile, the dynamics of FSS and developing risk factors are still considered relatively under control.

However, continued Yudhi, IDIC believes that the economic recovery needs to be encouraged by balanced stimulus policies while still paying attention to long-term stability factors.

"One of the policy efforts is to continue to provide space for banks to be able to manage low costs so that they can provide incentives for banks and economic recovery," concluded Yudhi.