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Jakarta Post

Loan growth slows to 21-month low as businesses 'wait and see'

  • Riska Rahman

    The Jakarta Post

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Jakarta   /   Fri, October 25, 2019   /  08:09 am
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The Bank Indonesia building on Jl. MH Thamrin in Central Jakarta.(Shutterstock.com/GeorginaCaptures)

Bank Indonesia (BI) is cutting its benchmark rate for the fourth consecutive month as it aims to boost a weakening economy signaled by loan growth slowing to a 21-month low against the backdrop of a trade war-driven global economic slowdown. The central bank cut the seven-day reverse repo rate by 25 basis points (bps) to 5 percent, the lowest level since May 2018, backed by stable inflation and attractive yields in the financial market, in support of an accommodative policy for business expansion. “Loan and deposit rates are expected to go down further as BI eases monetary policy,” BI Governor Perry Warjiyo told the media after a two-day board of governors meeting. The weighted average deposits rate already dropped 13 bps to 6.57 percent in September compared to the August level. The lending rate also dropped, especially on investments and working capital loans, resp...