"We are making every effort so that in one month, the lending rates are lowered and show results by the end of the year. The lending rate would stand at around 9.0 percent," Darmin said.
Jakarta (ANTARA News) - Chief Economic Minister Darmin Nasution said the government is finalizing steps to lower the lending rate which is still high and a burden on the people.

"We are making every effort so that in one month, the lending rates are lowered and show results by the end of the year. The lending rate would stand at around 9.0 percent," Darmin said here on Tuesday.

He said the various steps taken by the government were all interrelated. Therefore, coordination was required among the government and all relevant agencies, such as the Indonesian central bank (Bank Indonesia/BI), the Financial Service Authority (OJK) and the Saving Guarantee Institution.

Darmin said the first step is to ensure that the inflation growth remains within a range of 4.0 percent. A higher inflation could affect peoples savings.

The second step is to communicate with the relevant ministries and state-owned enterprises (SOE) so that their deposits in the bank do not attract rates that may trigger a rise in the interest rates.

"If they want to deposit it with banks, the logical interest rate will be 5.0 percent, or one percent above the inflation rate, so that the real interest rate remains positive. That way, there would be no reason for them to say that keeping the savings in the banks is not profitable. If one wants a high interest rate, he or she should invest in the government state debentures (SUN)," noted Darmin.

The third step is that inflation should remain under control and SOEs do not use a special rate for their deposits. This will allow the BI to make an assessment and adopt an interest rate policy which keeps it within a range of four or five percent.

Darmin said as the fourth step, the OJK will take measures to make the operational cost more efficient at overhead level. As part of this measure, the special rate would be increased and it would not exceed 100 percent basis points from the average interest rate.

The special rate constitutes a special treatment given by banks to priority customers who have large funds and are willing to save their money at an interest rate higher than the normal one.

With the four steps being effectively implemented in the coming one month, Darmin is convinced the lending rate will gradually go down and will adjust itself in alignment with the efforts made by the government, the BI, the OJK and the Saving Guarantee Institution.(*)

Editor: Heru Purwanto
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