TEMPO.CO, Jakarta - A number of banks said they are ready to cut lending rates in response to Bank Indonesia's (BI) low rates policy. So far this year, the central bank had cut the 7DRR benchmark interest rate four times by 100 bps to a level of 5 percent.
Speaking at the 2019 Indonesia Banking Expo (IBEX) in Jakarta, November 6, BRI president director Sunarso BI's interest rate cut policies would sooner or later be adopted by banks. However, this would require some time.
"It requires time and transmission," he said.
He added that banks' lending rates would also follow market mechanisms, so there was no reason for banks to hold rates up. "Banks follow trade; if the market is down, there is no reason for us not to go down as well," he said.
Meanwhile, BCA president director Jahja Setiaatmadja said the company would gradually lower interest rates. "However, there should be no argument credit [disbursement] would automatically rise when rates are down. There's no guarantee on that," he said.
In his opening address for the 2019 IBEX, President Joko Widodo also asked banks to lower their loan rates.
"I am asking everyone to seriously consider lowering lending rates," Widodo said. "BI Rate is down, [but] banks' [lending rates] have not. I will wait".