Banks Start Lowering Interest Rates to Lure Debtors

By Editorial Team 16/11/2021
economic downturn
Summary

Governor of Bank Indonesia (BI) Perry Warjiyo stated that the overnight interbank money market (PUAB) interest rate and the one-month deposit rate went down by 50 and 171 basis points (bps) since September 2020 to 2.80 and 3.28 percent, respectively, in September 2021.

These declines triggered interest rate drops on new bank loans. The recovering economy and people’s mobility have improved bank risk perceptions leading to lower interest rates for new loans. Moreover, the central bank also expects banks to keep lowering lending rates as a part of a joint effort to boost loan disbursements.

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