TEMPO.CO, Jakarta - Bank Indonesia (BI) has cut its BI seven-day repo rate by 25 basis points from previously five percent to 4.75 percent. Rates on both deposits and loans were also cut to be adjusted with the trend.
"The loan rate will continue to decline until the end of this year. We estimate that it will decline by 10-20 basis points," BI economic and monetary policy director Juda Agung said at the BI Complex in Jakarta on Thursday, October 20, 2016.
According to Juda, the adjustment of loan and deposit rates was in line with the BI reference rate cut, and it could be sooner given another slash in the future.
Juda explained that the deposit rate for BUKU I and BUKU II banks, as well as for some BUKU III banks, is declining faster compared to BUKU IV banks, while the loan rate continues to increase.
In addition, the deposit facility rate was cut by 25 basis points from 4.25 percent to 4 percent, and the lending facility rate was slashed from 5.75 percent to 5.5 percent. The new rates will be applied on October 21, 2016.
Earlier, BI senior deputy governor Mirza Adityaswara said that to this date, the deposit rate has been slashed by 91 basis points following reference rate cut by 100 basis points in early 2016. In addition, the rate of loans for working capital and investment has declined by 65 percent, and the interest rate for consumption credit has been cut by nine basis points.
"So, I think there is still a room for loan and deposit rate cuts," Mirza said on Monday, August 22, 2016.
GHOIDA RAHMAH
