JAKARTA. Slow but sure, the expectations to enjoy lower credit rate are fading away, as the bank’s credit rate has started increasing. Executive Director of Economic and Monetary Policy Department at BI (the Central Bank) Juda Agung said, the bank’s credit rate has increased by one bps during January 2017. This has terminated the trend of credit rate reduction by 79 bps in 2016.
BI estimates that the banks have yet to significantly respond to the relaxation of monetary policy under the scheme of BI’s 7-days Reserve Repo Rate (7DRR). “BI is expecting that the banks will continue adjusting the interest rate,” Juda said, last weekend.
The increase in credit rate in January 2017 was driven by the increase in the rate of deposits with the tenors of 1 and 24 months. In December 2016, the interest rate of the deposits with 1 and 24 months increased by 10 bps, from 6.36% and 7.36% in November 2016 to 6.46% and 7.38%, respectively.
Financial Director of Bank Tabungan Negara (BTN) Iman Nugroho Soeko said that the interest rate would increase if BI’s 7 days reserve repo rate rises, as the impact of the increase in The Fed’s rate. “Let alone, the inflation rate in this year is predicted to be higher than the last year,” he told KONTAN, Sunday (19/2).
Corporate Secretary of Bank Negara Indonesia (BNI) Ryan Kriyanto said, individually, not industrially, the bank’s credit rate is potentially to decrease. This might be realized if the bank can expand the portion of cheap funds of more than 60% of the total bank’s liquidity, as well as upgrade the operational efficiency.
Ryan continued, the banks are likely to struggle to reduce the credit rate, on the grounds that the BI’s 7DRR would be more limited, due to the risks of The Fed’s rate rise minimum in two times in this year.
Along the year of 2016, the deposits interest rate dropped by 122 bps, but the credit interest rate only dropped by 79 bps. As of January 2016, most of the major banks are still setting a double-digit credit.
(Muhammad Farid/Translator)
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