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BCA to keep lending rate unchanged as corporate-loan growth slows
The country’s largest private lender has vowed to keep credit interest rates unchanged, affording borrowers some breathing room despite multiple rate hikes by the central bank.
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Customers walk out of a Bank Central Asia (BCA) branch office in Jakarta in 2019. (JP/Nurhayati )
T
he country’s largest private lender, Bank Central Asia (BCA), has vowed to keep credit interest rate unchanged, affording borrowers some breathing room despite recent multiple rate hikes by Bank Indonesia (BI).
BCA CEO Jahja Setiaatmadja explained on Thursday that the speed of rate adjustment among banks depended on the size of their exposure to time deposits, which would become costlier whenever central banks lifted their rates, prompting banks to raise their lending rates to make up for the higher cost.
BCA explained that its exposure was relatively small at 12 percent, with the rest coming from savings accounts, a much cheaper source of funds, which reduced the impact of BI benchmark rate hikes on BCA’s costs, and hence also on its lending rates.
“We expect the transmission to our lending will be rather slow. Overall, on credit, we will try to maintain [current credit rates] first and follow the market,” Jahja told reporters during the bank’s quarterly briefing.
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BI raised its benchmark rate by 50 basis points (bps) to 4.75 percent at its monthly board of governors meeting on Thursday, marking a third consecutive increase.
BI began increasing its key rate in August to curb rising inflation and to protect the rupiah amid a faster course of monetary tightening by the United States Federal Reserve.
