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View all search resultsBI urges banks to boost lending amid slowing growth
The central bank is urging banks to boost lending to spur the economy amid a downward trend in credit growth to May, including NPLs and LARs.
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Bank Indonesia (BI) Governor Perry Warjiyo addresses a live streamed press briefing on June 18, 2025, following the central bank’s board of governors meeting. (Courtesy of Bank Indonesia (BI)/-)
B
ank Indonesia (BI) has called on the banking industry to ramp up loan disbursement to help strengthen the national economy amid sluggish credit growth.
According to BI Governor Perry Warjiyo, loan growth in June slowed to 7.77 percent year-on-year (yoy) from 8.43 percent the previous month, which was primarily attributed to banks shifting to investing in securities while tightening lending standards.
“We are certainly aware that banks must be cautious in assessing which sectors or companies are eligible for credit. However, we encourage them to work together to lower interest rates and stimulate loan growth,” Perry told a press conference on Wednesday in Jakarta.
The central bank noted that credit demand remained concentrated in a few sectors, particularly export-oriented industries, construction, logistics and services. It also reported a slight increase in the rate for one-month time deposits from 4.81 percent in May to 4.85 percent in June.
Perry emphasized that the central bank had gone “all out” in its efforts to support economic growth, through various monetary policies aimed at maintaining financial stability in the banking sector.
“We have lowered interest rates, and there is still room for further cuts. We continue to expand liquidity through expansionary monetary policy. We stabilize the rupiah exchange rate,” he said.
In addition, Perry said BI had significantly increased incentives under the Macroprudential Liquidity Incentive Policy (KLM), which had reached Rp 376 trillion (US$23.1 billion) as of the first week of July.
