The Deposit Insurance Corporation (LPS) has increased deposit insurance rates both in rupiah and foreign exchange.

For savings in rupiah, the rate increased by 25 basis points (bps) to 6 percent, while for savings in foreign exchange the rate increased by 50 bps to 1.25 percent.

“The deposit insurance rates increased because banks have started to increase their saving rates,” said chairman of LPS Commissionaire Council Halim Alamsyah in Jakarta on Wednesday, as reported by kontan.co.id.

Within a week of the increase of Bank Indonesia’s seven day reverse repo rate to 4.75 percent, a number of banks, including Bank Mandiri, BCA, CIMB Niaga Bank Partama and Bank Tabungan Negara, increased their deposit interest rates, according to the Money Market Information Center.

The deposit rate increase is 10 to 30 bps on average, depending on the period. Bank Mandiri even increased its rate by 200 bps for deposit rates for a one month period.

Bank Bukopin finance and IT director Adhi Brahmantya said his bank had increased saving rates by 25 bps, while Bank Rakyat Indonesia finance director Heru Koesmahargyo said the bank was considering to increase the rate in the near future.

Maybank Indonesia finance director Thila Nadason said the bank was in wait-and-see mode on the increase of the rupiah deposit rate, but it had increased the deposit rate in foreign exchange. (bbn)

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