BI lowers interest rate to 5.25%

BI lowers interest rate to 5.25%

Logo of Bank Indonesia (ANTARA)

Jakarta (ANTARA) - The Bank Indonesia (BI) Board of Governors agreed to lower the BI 7-day Reverse Repo Rate by 25 basis points (bps) to 5.25 percent during this week's BI Board of Governors meeting.

The Deposit Facility (DF) rates were lowered by 25 bps to 4.50 percent and Lending Facility (LF) rates were lowered by 25 bps to 6.00 percent, according to a statement from Bank Indonesia here Friday. To strengthen the policy mix in terms of building economic growth momentum, Bank Indonesia has relaxed the macro-prudential policy to increase the bank lending capacity and catalyze the demand for new loans.

Furthermore, Bank Indonesia has also refined the Macro-prudential Intermediation Ratio (MIR)/Sharia MIR by expanding the loan/financing components received by the banks as a source of funds when calculating the MIR/Sharia MIR.

Bank Indonesia has also relaxed the loan-to-value (LTV) and financing-to-value (FTV) ratios for property loans/financing by five percent and down payments on motor vehicle loans in the 5 to 10 percent range, while providing additional LTV/FTV relief on green property loans/financing and down payments on loans for environmentally friendly motor vehicles by five percent respectively.

The amendment will become effective on December 2, 2019. Meanwhile, the payment system policy and deepening financial market will constantly be strengthened to stimulate economic growth.

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