BI Rate Won't Affect Loans and Fixed Deposits

VIVAnews - Bank Indonesia's decision to cut the BI Rate will not, at least in the short run, lead to a decrease in loans interest rate and fixed deposit interest rate.

"There will be no short-term impact," said Analyst of Bank Rakyat Indonesia (BRI) Djoko Retnadi to VIVAnews on Wednesday, Jan. 7.

According to Retnadi, the average fixed deposit interest is above 10 percent. If banks do not yet have equal liquidity, then it will be unlikely that fixed deposit interest rate and loans rate will fall. "Loans interest will be lower if the BI Rate is cut significantly to around eight percent," he said.

Bank Indonesia cut BI Rate by 50 basis points to 8.75 percent. This was due to pressure of the falling inflation rate.

However, he reminded that the BI Rate cut signaled that the central bank supports the real sector. "However, speculation on foreign exchange is still a threat," he said.

Translated by: Bonardo Maulana Wahono