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View all search resultsThe OJK as well as industry observers have welcomed the Finance Minister's move to extend the liquidity injection policy for another six months in a bid to generate higher loan growth, while suggesting that a subsequent extension could be on the books when the current period ends in March.
Credit growth rose 7.74 percent year-on-year (yoy) to Rp 8.3 quadrillion (US$493 billion) in November, accelerating from growth of 7.36 percent yoy in October, according to the Financial Services Authority (OJK).
Disappointing data on bank lending raises questions about the effectiveness of the Finance Ministry’s Rp 200 trillion (US$12 billion) liquidity injection conducted in early September to jump-start economic activity, with economists pointing to a lack of credit demand.
Bank Indonesia (BI) plans to roll out additional macroprudential liquidity incentives (KLM) on Dec. 1 through new disbursement schemes to boost sluggish credit growth and expedite the pass-through of central bank rate cuts to commercial banking rates.
Bank Indonesia has kept its benchmark interest rate in place after decreasing it by 25 basis points (bps) in each of the past three months, but the central bank is open for further cuts to encourage lending and push economic growth to its true potential.
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