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New loosened loan-to-value policy coming in Q3
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A woman walks past Bank Indonesia (BI). BI governor Agus Martowardojo has said the bank's new loan-to-value (LTV) policy will be completed in the third quarter of the year. (Kontan/Muradi)
T
he new, loosened loan-to-value (LTV) policy will be completed in the third quarter, Bank Indonesia governor Agus Martowardojo has announced.
In the easing policy, the central bank will reduce down payments in a bid to spur credit growth and rejuvenate household consumption, to in turn boost economic growth.
"In relation to the down payment and loan-to-value ratio, we are still discussing those with the banking industry. We expect the regulation will be issued no later than the third quarter," Agus said in Jakarta on Friday.
At the monthly meeting, BI's board of governors decided to ease monetary policy further, focusing on the LTV for mortgages and automotive loans.
In the prevailing regulations, the central bank has set a maximum loan at 80 percent of the total value of the financing, meaning debtors must pay at least 20 percent as down payment.
"It's still being discussed. In the monthly board of governors meeting, we stated that we will review our macro-prudential policies while maintaining and upholding the prudential principles," Agus added. (ags)
