JAKARTA. The government’s request to the banking sector to implement one digit credit interest rate by the end of this year is unlikely to realize, due to the slow trend of the decline in credit interest rate.
Based on the recent data on circulated money of BI (the Central Bank), the banks’ credit rate in average has dropped to 12.21% as per October 2016. This only slightly decreased by 2 bps compared to the level of 12.23% in the previous month (month on month basis).
The number is much higher than the single digit category. BI reported that the credit interest rate has a slower decrease rather than deposit interest rate.
As comparison, during January 2016-October 2016, the credit interest rate only dropped by 62 bps, while the deposit interest rate was cut by 130 bps.
Executive Director of Economy and Monetary Policy Department of BI Juda Agung said that the banks may still continue to reduce the credit interest rate.
President Director of PT Bank OCBC NISP Tbk Parwati Surjaudaja claimed that the bank has reduced the credit rate by 25 bps for the segment of corporate credit in October 2016. “We will reduce the retail credit rate by another 25 bps in this December,” Parwati added.
Unfortunately, most of the banks do not adopt the similar stance with OCBC NISP. Some major banks are reluctant to decrease the credit rate due to the market condition.
Financial and Treasury Director of PT Bank Tabungan Negara Tbk (BTN) Iman Nugroho Soeko said that the bank has not yet planned to further reduce the credit rate, on the grounds that the bank has cut the credit rate at the end of October 2016.
“We also will anticipate the market reaction over The Fed’s plan to increase its rate,” Iman said. BTN claimed that its non-subsidy mortgages has stood at one-digit level or at the level of 9.5%-9.9%.
Similarly, Planning and Operation Director of PT Bank Negara Indonesia Tbk (BNI) Bob T. Ananta said that the policy of reducing the interest rate will very depend on the market situation. “We have not planned yet to lowering rate by the end of 2016,” Bob said.
Meanwhile, Corporate Secretary of PT Bank Rakyat Indonesia Tbk (BRI) said that every month BRI always conducts review on savings and loans interest rates. In this case, BRI always considers the cost of fund and credit risk factors.
BRI is also monitoring the rate competition at the market, as well as market condition that is waiting for The Fed’s decision. “BRI has reduced the retail credit interest rate by 9.75% in the middle of 2016,” Hari said.
The deposit interest rate is likely to further decrease. For an example, the deposit interest rate for one month tenor has dropped by 17 bps from 6.63% in September to 6.46% in October 2016. (Muhammad Farid/Translator)
