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View all search resultsDisappointing 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.
The government has promised strong gross domestic product growth for the remainder of this year and onward as it expects higher consumption, underpinned by increased private sector activity and government spending.
The government has announced plans to shift some state deposits from the central bank to commercial banks to allow for more loan disbursements and thereby invigorate private sector activity in a bid to achieve 6 to 7 percent gross domestic product growth.
Bank Indonesia (BI) has flagged declining loan growth in the country’s banking industry amid stricter lending standards and weak demand, emphasizing the need to boost credit disbursement to push national economic growth.
Bank Central Asia (BCA) posted a net profit of Rp 29 trillion (US$1.7 billion), up 8 percent year-on-year (yoy), in the first half of this year, in line with growing loan disbursement and funding, as well as rising transaction volume.
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