Illustration ( Rizal)
Illustration ( Rizal)

Banks Cannot Easily Lower Lending Rates: Association

English indonesian economy (en)
Media Indonesia • 26 November 2019 15:45
Jakarta: The National Private Banks Association (Perbanas) said that banks cannot easily lower lending rates due to tight liquidity and unchanged deposit rates.
According to Perbanas vice chairman Tigor Siahaan, banks have yet to lower their lending rates because deposit rates are still unchanged.
"If we can lower lending rates, we will do it. It depends on deposit rates. If deposit rates are still unchanged, it will be difficult to do it," he said during the meeting with the House of Representatives’ Commission XI on Monday, November 25, 2019.

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The same message was also delivered by BTN Finance Director, Nixon Napitupulu. Tight liquidity was also named as the other main obstacle.
“The House of Representatives always complains about this issue. The answer is simple. Lowering deposit rates takes around 3-6 months. Secondly, the liquidity is tight. We cannot do it if the liquidity is tight," he explained.
Nevertheless, Bank Mandiri Finance Director Panji Irawan predicted that banks will be able to lower their lending rates in the near future.
"I do not know by how many points it will go down. But it is definitely in the trend," he said. (Translator: Muhammad Gestinev)


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