News Release

BI Icon

Communication Department​​

5/28/2021 8:00 PM
Hits: 1078

Lending Rate Transparency to Accelerate Economic Recovery

 
Press Releases

No. 23/133/DKom

Bank Indonesia continues strengthening lending rate transparency to accelerate monetary policy transmission to interest rates in the banking industry and stimulate bank lending to the corporate sector. That was the key takeaway of Bank Indonesia Senior Deputy Governor, Destry Damayanti, at today’s (28/05) book launch for "Macroprudential Policy in Indonesia" under the auspices of the virtual seminar entitled "The Role of Macroprudential Policy in Economic Recovery". Lower prime lending rates in the banking industry have been accompanied by more subdued reductions in terms of interest rates on new loans, with the prime lending rates falling 174 bps from March 2020 to March 2021 and interest rates on new loans just 59 bps in the same period.

Transmission of the lower policy rate to commensurate lending rates is expected to boost demand for new loans and assist the economic recovery. Since February 2021, Bank Indonesia has published its Assessment of Policy Rate Transmission to Prime Lending Rates in the Banking Industry, which aims to accelerate monetary policy transmission and broaden information dissemination to corporate and individual consumers in order to enhance governance, market discipline and healthy competition in the lending market.

Furthermore, Destry Damayanti also took the opportunity to frame the growing importance of macroprudential policy in terms of maintaining financial system stability and fostering economic recovery during the Covid-19 pandemic, in conjunction with monetary policy, fiscal policy and microprudential regulation. The advantage of macroprudential policy is the ability to manage financial imbalances holistically and targeting specific sectors with an economic multiplier effect, such as the property and automotive sectors as well as micro small and medium enterprises (MSMEs), along with other export-oriented priority sectors. Bank Indonesia has implemented several macroprudential policies to accelerate the economic recovery, such as by relaxing the loan-to-value (LTV) ratio on housing loans and downpayment requirements on automotive loans, while adjusting the Macroprudential Intermediation Ratio (MIR) target (84-94%) and including letters of credit (L/C) as a MIR component to stimulate bank lending. In addition, Bank Indonesia is set to launch the Macroprudential Inclusive Financing Ratio (RPIM) to catalyse bank lending to MSMEs through inclusive finance.

"Macroprudential Policy in Indonesia" was launched as a reference, particularly for academics, to increase understanding concerning macroprudential policy, and for players and decision-makers in the national financial industry, the Government and other relevant authorities as well as all Indonesians interested in understanding macroprudential policy in more depth, from the concepts and frameworks to implementation. Greater understanding of macroprudential policy amongst all parties is expected to increase synergy towards maintaining financial system stability. The book will be available from all leading bookstores, with an overview provided in the Appendix. Moving forward, Bank Indonesia will continue to formulate and synergise innovative and measured macroprudential policies to expedite the national economic recovery, while maintaining financial system stability and resilience.


Jakarta, 28th May 2021
Head of Communication Department
Erwin Haryono
Executive Director
Information about Bank Indonesia
Tel. 021-131, Email: bicara@bi.go.id

Lampiran
Kontak

​Contact Center BICARA : (62 21) 131 e-mail : bicara@bi.go.id
Working hours: Monday to Friday, 08.00-16.00 West Indonesia Time

Halaman ini terakhir diperbarui 5/31/2021 11:16 AM
Was this page useful?
Thank You! Would you like to give more detail?
Tag :

Other Articles