ID :
59505
Thu, 05/07/2009 - 20:56
Auther :
Shortlink :
https://www.oananews.org//node/59505
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BI MUST URGE BANKS TO LOWER LENDING RATE: OBSERVER
Jakarta, May 7 (ANTARA) - Bank Indonesia (BI/the central bank) must urge banks to lower their lending rates after it had cut its key rate by 0.25 basis points to 7.25 percent, economic observer Umar Juoro said.
"BI must aggressively persuade banks so that they would cut their lending rates," Umar Juoro, who is also director of the Center for Information and Development Studies (Cides) said here on Thursday.
BI's board of governors in its meeting on Tuesday decided to cut the central bank benchmark rate to 7.25 percent from the month's rate of 7.50 percent.
The banking lending rates at present still range at 13-14 percent, which indicates a wide spread between them and the BI benchmark rate.
In the meantime, according to Juoro, the government should also provide stimulation or guarantee for certain economic activities so that the chance for credit extension would become bigger.
Juoro gave an example that the government could take over the problem of land clearance for an infrastructure project so that banks would disburse their credits soon.
"In this way, and with the purchasing power of the people still high, the development of the real sector would boosted soon," he said.
He predicted that BI would lower its rate again to 7 percent next month.
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"BI must aggressively persuade banks so that they would cut their lending rates," Umar Juoro, who is also director of the Center for Information and Development Studies (Cides) said here on Thursday.
BI's board of governors in its meeting on Tuesday decided to cut the central bank benchmark rate to 7.25 percent from the month's rate of 7.50 percent.
The banking lending rates at present still range at 13-14 percent, which indicates a wide spread between them and the BI benchmark rate.
In the meantime, according to Juoro, the government should also provide stimulation or guarantee for certain economic activities so that the chance for credit extension would become bigger.
Juoro gave an example that the government could take over the problem of land clearance for an infrastructure project so that banks would disburse their credits soon.
"In this way, and with the purchasing power of the people still high, the development of the real sector would boosted soon," he said.
He predicted that BI would lower its rate again to 7 percent next month.
***2***
