ank Indonesia's (BI) relaxed down payment regulations for vehicle loans and mortgages could be considered a “sweetener” to the economy, but doubts remain as to whether banks will immediately lower their requirements or if the policy will boost car and house sales, which are expected to jack up slower domestic consumption growth.
The central bank announced on Thursday that it was easing down payment requirements for housing and vehicle loans by 5 to 10 percentage points (ppt) as of Dec. 2. The policy allows down payments of just 15 percent on motorcycle or car purchases, down from the respective 20 percent and 25 percent. Eco-friendly houses and electric vehicles will get an additional down payment relaxation of 5 ppt.
BI announced its macroprudential policy on top of its decision to lower its benchmark interest rate by 25 basis points (bps) for a third consecutive month this year to boost slowing economic growth.
“We can say that the policy mix is a much needed sweetener for banks and real estate players,” Bank Negara Indonesia (BNI) economist Ryan Kiryanto said in a text message on Thursday.
“However, this is not enough. This lavish BI policy needs to be balanced with government accommodative or relaxed fiscal, economy and investment policies as well,” he said.
Samuel Sekuritas economist Lana Soelistianingsih expressed doubt that the policy would improve loan disbursements in 2020.
“If the economy doesn’t improve, it will slow companies’ performance and in turn make consumers withhold spending,” she said.
Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.
Thank you for sharing your thoughts. We appreciate your feedback.