Jakarta –
Bank Indonesia (BI) officially announced an increase in the BI 7-Day Reverse Repo Rate (BI7DRR) 0.25% to 6% on Thursday (19/10). BI has taken this step since it last made adjustments in January 2023 or after being detained for eight months.
Banking observer, Paul Sutaryono, said that increasing BI’s benchmark interest rate was a strategic step. This was done to prevent the depreciation of the rupiah exchange rate against the US dollar from becoming too high.
“This is also a surefire step to anticipate an increase in the US benchmark interest rate (The Fed Fund Rate/FFR) which is predicted to rise. The increase aims to achieve the US inflation target of 2%,” said Paul to detikcomFriday (20/10/2023).
Will Banks Increase Credit Interest?
The increase in BI interest rates has the same domino effect on the increase in bank credit interest, including KPR, which can lead to an increase in the prices of products and services. Even so, Paul believes that this increase will not have that impact.
“Why? Because banking liquidity is still quite high,” he added.
According to him, this can be seen in the liquid assets (non-core deposit) ratio (AL/NCD) of 118.50%, far above the 50% threshold. Likewise, liquid assets/DPK (AL/DPK) was 26.49%, still above the 10% threshold.
Likewise, PT Bank Central Asia Tbk (BCA) Economist David Sumual believes that so far the bank has not shown any movement. Moreover, it is supported by liquidity which is still quite good, coupled with quite tight competition in the industry. However, according to him, the impact of this policy will vary depending on the credit sector and its market segmentation.
“Maybe most banks are still looking first, wait and see. But usually the fastest money market (short-term loan) in the past, when interest rates rose, it had an immediate impact. Many have interest rates floatingfor example benchmark interest rates, labour rate (wages). So if the Fed goes up, the trend labour rate goes up, so the interest rate on their credit will automatically go up,” said David, when contacted separately.
Apart from that, according to him, an increase or decrease in the reference interest rate does not necessarily have a linear impact on bank credit interest. According to him, the trend in the last year actually shows that there are some who are implementing the opposite. There are many factors that are taken into consideration by banks, but the main one is the benchmark interest rate, balanced with competitive conditions.
“There are some things that tend to go down (interest), for example KPR, the competition is very tough so a lot of them are actually lowering it, there are promotions, various things, those related to consumer credit actually tend to go down. Many motor vehicle loans have promotions,” he explained. .
When will banks respond to BI interest rates? Check the next page.
(shc/ara)
2023-10-21 13:15:43
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