BI, Bapepam to regulate one-year securities

Bank Indonesia (BI) and the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) plan to regulate below-one-year securities to create a more competitive money market that may lead to cheaper liquidity.

While BI Acting Governor Darmin Nasution could not estimate the amount of liquidity that might be gained, he said a developed money market would provide alternate funding.

"The liquidity amount cannot be determined now,” he said. “But in other countries where the money market is well developed, there are other funding alternatives."

Darmin said earlier the banks were not yet efficient because the spread between deposit rates and lending rates remained high compared to neighboring countries.

Analysts said banks set high-lending rates because the cost of funds was high.