State Banks to Cut Loan Rate Late March

VIVAnews - Chairperson of State Banks Association (Himbara) Agus Martowardojo said state banks will continue cut loan interest rate.

"Within the first months of 2009, state banks have cut rate by between 0.5 percent and 1 percent," said Martowardojo in Jakarta on Tuesday, March 24. "By the end of the month, interest rate will be cut once again. Yet, it is still reviewed," he claimed.

He emphasized that if state banks' loan interest rate is cut, then it is expected that other banks will set out a review. Afterwards, they may adjust interest rate.

"If fixed deposit with special rate decreases, then loan interest rate will follow," he said.

In fact, Martowardojo stressed that if the BI Rate can have another cut - and a call for institutional investors not to request high saving rate is made - then it will be easier for loan interest rate to be cut. For the time being, the BI Rate is at 7.75 percent.

"However, every bank has different condition," he said in Jakarta, on Tuesday, March 24.

He stated that the cut in loan interest rate will depend on various factors such as fund costs, liquidity adequacy, and required margins to deal with risks.

--

Translated by: Bonardo Maulana Wahono