|
The Insurance Deposit Agency (LPS), which guarantees deposits
at the nation's banks, cut its rupiah deposit rate by half a percentage
point, paving the way for lower lending rates after the central bank's
own key rate cut last week.
The agency lowered the maximum guaranteed interest rate for
rupiah-denominated deposits for the one-month period from Sept. 15 to
Oct. 14 to 11.25 percent, LPS chief executive Krisna Wijaya said in a
statement released Monday.
It left the maximum guaranteed rate for dollar deposits at 5 percent,
and the rate for all deposits at rural savings and loan banks at 15.75
percent.
The reduction in the guaranteed rupiah deposit rate comes after the
central bank on Sept. 5 cut its benchmark Bank Indonesia rate by half a
percentage point to 11.25 percent, after inflation continued to slow in
August.
On-year inflation eased for a third month in August, with consumer
prices only rising by 14.9 percent from a year earlier, after creeping
up slightly to 15.6 percent in May.
The LPS's rate cut will add to the BI's recent rate trimmings in
encouraging banks in the country to lower their deposit rates, and in
turn their lending rates.
This is expected to help revive growth in the country, after the
public's purchasing power and loan demand for both consumption and
investment weakened.
Banks will want to keep their deposit rates on par with LPS's maximum
rate to attract customers, while still receiving guarantees from the
state for their deposits. Lending rates are expected to come down as
well with banks still gaining a healthy margin against the cost of
funding their deposits.
Bank Negara Indonesia (BNI) economist Ryan Kiryanto, however, said it
would take time for lenders to lower rates, depending on their own
policies.
Coordinating Minister for the Economy Boediono, after the central
bank's rate cut last week, called on lenders in the country to lower
their rates to help spur economic growth.
Meanwhile, Bank Indonesia Governor Burhanuddin Abdullah said there was
a possibility of the central bank's key rate dropping into
single-digits if inflation continues to ease until the year's end.
"If inflation slows down to 7 percent then the BI rate can reach 10
percent," he said. "Hopefully, inflation and the rate can go further
down.".
|
