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LPS cuts guaranteed interest rate by 50 bps
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Deposit Insurance Corporation (LPS) commissioner board head Halim Alamsyah (left to right), poses with LPS executive director Fauzi Ichsan and LPS secretary Syamsu Adi Nugroho before a press conference in Jakarta on Tuesday. (JP/Anton Hermansyah)
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ndonesia's Deposit Insurance Corporation (LPS) has cut the guaranteed interest rate for Rupiah-denominated savings by 50 basis points (bps) to 6.25 percent, following the same measure in the banking industry.
As for the foreign exchange deposit, the rate remains at 0.75 percent. The new rates will be effective from Sept. 15 to Jan. 15, 2017.
According to LPS data, the average deposit rate in the industry has been down from 6.94 percent in February to 6.1 percent at the end of August.
"The LPS rate is a mediation between Bank Indonesia’s reference rate and the applied rate at the banks," LPS commissioner board head Halim Alamsyah said at his office in Jakarta on Tuesday.
He added, the current situation supported low interest rates until the end of the year. Inflation is most likely to be well-maintained at around four percent while the liquidity is enough to meet the domestic demand due to the inflow from the tax amnesty program.
"Liquidity in the bank is also high because the current economic condition has been driving banks to be more careful in disbursing their deposit into credit," Halim said. (ags)
