JAKARTA. The concern on the liquidity squeeze has been growing. This reflects on the data of BI (the Central Bank) that the banking deposits interest rate with more than six month tenor has increased by 1 bps-10 bps on month-on-month (mom) basis to 7.12%-7.4%.
For an example, the deposits interest rate with six month tenor as of November 2016 stood at 7.12%, increased by 10 bps from the previous month. During the same period, the interest rate of deposits with 24 month tenor increased by 5 bps to 7.3%.
Deposit Insurance Agency (LPS) predicts, the deposits interest rate in 2017 will be increasing gradually. Head of Economic Risk and Financial System Group of LPS Dody Arifianto said that the increase in deposits interest rate was driven by two factors.
First, the effect of The Fed’s rate rise. Second, the prediction on liquidity squeeze. LPS predicts that deposits interest rate will increase by 10 bps in every quarter in 2017. Deputy Governor of BI Perry Warjiyo said, BI will not increase the seven days reserve repo rate in this year.
Semester II
Some major banks predict that the deposits interest rate will start increasing in the second semester, following The Fed’s plan to increase the benchmark interest rate this year.
President Director of Bank Mandiri kartika Wirjoatmodjo said that the deposits interest rate will be following The Fed’s rate, which is predicted to increase in two times, in June and August, respectively. “The scale of deposits interest rate rise in semester II will depend on the increase in The Fed’s rate,” Tiko said.
However, according to Tiko, the deposits interest rate will still have chance to decrease. This will depend on the capital inflow of tax amnesty program. Bank Mandiri obtained additional liquidity from tax amnesty as much as Rp 20 trillion.
Financial Director of Bank Rakyat Indonesia (BRI) Haru Koesmahargyo has the similar projection. He said, the banks are likely to increase the deposits interest rate to adapt with the increase in The Fed’s rate. “There will be an increase in deposits interest rate by 25 bps in the semester II of 2017,” Haru told KONTAN, Saturday (7/1).
Meanwhile, Director of International and Bank Treasury of Bank Negara Indonesia Panji Irawan said that BNI will consider the foreign capital outflow to determine deposits interest rate.
(Muhammad Farid/Translator)
