Increasing economic activity and public mobility have encouraged the improvement of banking risk perception...
Jakarta (ANTARA) - Governor of Bank Indonesia (BI) Perry Warjiyo has said that bank credit grew 4.7 percent in November 2021 compared to the corresponding period of the previous year.

"It was distributed more evenly for all utilization purposes -- both working capital credit, investment credit, and consumption credit, which grew 5.38 percent yoy (year on year), 4.3 percent yoy, and 4.11 percent yoy, respectively," he informed here on Thursday.

In addition, almost all economic sectors experienced a more broad-based credit growth, indicating that increasing demand for credit was in line with business activities recovery, he said.

BI continued to pursue a loose macroprudential policy, he noted. Meanwhile, banks lowered their lending standards in line with the declining credit risk perception, he added.

Related news: BI holds benchmark rates at 3.5% to maintain stability

Low monetary policy interest rates and very loose liquidity have encouraged banks to keep lending rates low, the BI governor said.

In the credit market, the decline in the banking basic lending rate has continued, followed by a decline in interest rate for new loans for all kinds of banks, except for Regional Development Banks (BPD), he informed.

"Increasing economic activity and public mobility have encouraged the improvement of banking risk perception, which has lowered the interest rates for new loans," Warjiyo remarked.

However, the decline in loan interest rates has been much lower than the decline in bank deposit interest rates, he said. It has made the spread between the two interest rates to continue to widen and the Net Interest Margin (NIM) to keep rising, he added.

Hence, BI has assessed that the banking sector can still lower its credit interest rates, he said.

In future, the central bank will continue strengthening its policy synergy with the government and other authorities in the financial sector to increase the business sector’s demand for bank credit and funding as people’s economic activities have started to recover, he added.

Related news: Relaxation of mobility restrictions will spur credit distribution: OJK



Translator: Agatha Victoria, Uyu Liman
Editor: Rahmad Nasution
Copyright © ANTARA 2021