BANKS BEGIN LOWERING INTEREST RATES: BANKER

Jakarta, Jan 19 (ANTARA) - Banks have begun lowering their interest rates on third party funds by about 0.5 to 1 percent, and are expected to cut interest rates on credits next, a banker said.
"So it is very likely that banks will also lower their interest rates on credits which at present range between 15 percent and 19 percent," Kostaman Thayib, retail banking director of PT Bank Mega, said here on Monday.
He said that credit interest rates were expected to go down in the coming two or three months and to boost credit expansion and ignite economic growth which was set this year at 4.5 to 5 percent.
"We are optimistic that the credit interest rates could be lowered in the coming two or three months as there is a clear prospect for that," he said.
After all, the inflation in January tended to drop which would encourage Bank Indonesia (BI/the central bank) to cut its benchmark rate which at present is about 8.75 percent, Kostaman Thayib said.
He said that if banks' credit interest rates were lowered, banks would increase the amount of credits they would provide for customers in the second semester of this year. ***1***