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View all search resultsThe latest move by Bank Indonesia (BI) to relax down-payment regulations to boost property and automotive sales will hinge on the appetites of consumers and banks, with the former facing much-reduced purchasing power as a result of the coronavirus pandemic.
In December, 2019 BI lowered the loan-to-value (LTV) ratio by 5 percent for environmentally friendly housing to 90 percent to promote the development of green housing in the country. With the lower LTV ratio, buyers will only need a down-payment of 10 percent when applying for mortgages from banks, down from 15 percent previously.
Bank 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.
Bank Indonesia’s (BI) decision last week to increase its reference rate by 50 basis points (bps) to 5.25 percent will negatively impact economic growth in the second half of 2018, a senior economist has said, although the central also introduced a relaxation policy on the loan to value (LTV) ratio in an attempt to booth the property sector.
Bank Indonesia (BI) Governor Perry Warjiyo has said the central bank will introduce loan to value (LTV) relaxation and other policies to help boost the property business during BI's board of governors meeting on Wednesday and Thursday.
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