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Jakarta Post

LPS lowers deposit insurance rates to 6.25 percent until end of year

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, November 20, 2019   /   03:52 pm
 LPS lowers deposit insurance rates to 6.25 percent until end of year A receptionist answers a phone call at the office of the Deposit Insurance Corporation (LPS) in Jakarta. LPS announced Tuesday a cut in the guaranteed rate for savings in rupiah to 6.25 percent (Kontan/Baihaki)

The Deposit Insurance Corporation (LPS) has cut its deposit insurance rates (SBP) for both rupiah and foreign exchange-denominated savings following the downward trend in Bank Indonesia’s benchmark rates.

The LPS said on Tuesday that the deposit insurance rate, also called guaranteed rate, for savings in rupiah at commercial banks had been lowered by 25 basis points (bps) to 6.25 percent, while the deposit rate for foreign currency savings had been decreased 25 bps to 1.75 percent.

In addition, the LPS also cut the deposit insurance rate for rupiah savings in secondary banks to 8.75 percent. The new rate will be effective from Nov. 20 until Jan. 24.

LPS chairman Halim Alamsyah said in Jakarta on Tuesday that the cut in the guaranteed rates was made as an adjustment to the decline in Bank Indonesia’s benchmark rate, which was reduced by another 25 bps to 5 percent in October. The central bank has lowered its benchmark rate by 100 bps since July.

According to the LPS, the average deposit rates for rupiah between Oct. 15 and Nov. 11 had declined 12 bps to 5.48 percent, while the average deposit rate for foreign exchange savings had decreased by 7 bps to 1.08 percent.

Meanwhile, the LPS reported that its total assets as of Oct. 31, this year had risen to Rp 119.4 trillion from Rp 102.7 trillion at the end of last year. During the same period, its total income rose to Rp 18.4 trillion from Rp 18 trillion. In addition, the claim payment had significantly increased to Rp 238.3 billion as of October from Rp 70 billion at the end of last year. (bry)