BRI CHIEF: GWM HIKE NOT TO AFFECT BRI`S INTEREST RATE

Jakarta, Sept 4 (ANTARA) - Bank Rakyat Indonesia (BRI) president director Sofyan Basyir said Bank Indonesia's decision to raise the primary reserve requirement (GWM) would not affect his bank's interest rate.

"Every increase in the GWM will certainly add burden. How far its extent is we will study it. If the hike is not very high it will not affect cost of fund and interest rates," he said here on Saturday.

He said BRI would immediately study the two recent decisions of the central bank linking to GWM and loan to deposit ratio.

Bank Indonesia on Friday announced its decision to raise the GWM from five to eight percent of the third party funds to absorb excess liquidity as of November 1, 2010.

It had also issued a regulation to determine the GWM upon loan-to-deposit-ratio (LDR) set at the lowest 78 percent to 100 percent the highest to encourage banks to carry out its intermediary fuction based upon prudential principles that would be effective as of March, 2010.

A bank's GWM would be raised 0.1 percent of its third party funds for every one percent shortage of LDR's lowest level of 78 percent.

Sofyan said BRI had no problems with regard to the GWM because its LDR is within the range.

"We just implement distribution of credits because undisbursed loans at BRI are quite large," he said.

BRI corporate secretary said BRI's LDR until June 2010 was recorded at 85 percent.