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Jakarta Post

BI rate cuts make no impact on growth in bank lending: Report

  • The Jakarta Post

JAKARTA   /   Mon, April 6 2009   /  09:38 am

Taking too long: Customers queue Saturday at an ATM in a mall in South Jakarta. Despite sharp cuts in Bank Indonesia’s key interest rate since December, growth in bank lending remains slow. With the BI rate at 7.5 percent, interest rates for bank lending remain high at 12 to 16 percent, discouraging companies and individual consumers alike from borrowing, thus doing little to get the wheels of the economy moving any faster. JP/P. J. Leo Despite sharp cuts in the central bank’s key interest rates since December, growth in bank loans remains slow as the sector grapples with rising bad loans and — for small and medium lenders — tight liquidity. Bank Indonesia has since December slashed its benchmark interest rate by 200 basis points, the latest cut being last Friday, to help bolster domestic demand and stimulate economic growth slowed by a drop in exports amid a global ...