ID :
89361
Fri, 11/13/2009 - 10:00
Auther :
Shortlink :
https://www.oananews.org//node/89361
The shortlink copeid
BI TO NARROW INTEREST-FUNDS SPREAD
Jakarta, Nov 12 (ANTARA) - Bank Indonesia Acting Governor Darmin Nasution said the bank would not regulate commercial banks` net interest margin (NIM) but try to narrow the spread between interest on credits and the funds.
"What has to be regulated in NIM. I did not say I would regulate the NIM but the spread," he said after a hearing with House Commission XI dealing with banking, national development and finance here on Thursday.
He said BI was just seeking details of data on the cause of the widening of the NIM or spread.
"Based on the data we would see and compare spreads in one and another as well as in the foreign banks and so we would know what we had to push down," he said.
Darmin said BI would also examine regulations for a possible change to push down the spread.
He said BI hoped everything that BI would do could help push credit interest down through cutting the spread set by banks.
He admitted since the 1998 crisis spread had tended to widen from 3.5 percent earlier to 5-6 percent.
He said the widening of the spread did not only happen in Indonesia but also in several other countries where it had risen from around 2.5 percent to 4-5 percent.
The spread has been made wider because banks wish to seek a big profit as a result of the crisis.
In reply to a question why BI`s key interest could not be lowered further so that the lending rate could be lower than 10 percent Darwin said the rate could not be below the inflation rate.
"Inflation must be taken into account. The trend of inflation is 5-6 percent. If we lower it further it will make funds holders to leave banks," he said.
He said other countries could make their key interest very low because they could curb inflation low too. ***2***
"What has to be regulated in NIM. I did not say I would regulate the NIM but the spread," he said after a hearing with House Commission XI dealing with banking, national development and finance here on Thursday.
He said BI was just seeking details of data on the cause of the widening of the NIM or spread.
"Based on the data we would see and compare spreads in one and another as well as in the foreign banks and so we would know what we had to push down," he said.
Darmin said BI would also examine regulations for a possible change to push down the spread.
He said BI hoped everything that BI would do could help push credit interest down through cutting the spread set by banks.
He admitted since the 1998 crisis spread had tended to widen from 3.5 percent earlier to 5-6 percent.
He said the widening of the spread did not only happen in Indonesia but also in several other countries where it had risen from around 2.5 percent to 4-5 percent.
The spread has been made wider because banks wish to seek a big profit as a result of the crisis.
In reply to a question why BI`s key interest could not be lowered further so that the lending rate could be lower than 10 percent Darwin said the rate could not be below the inflation rate.
"Inflation must be taken into account. The trend of inflation is 5-6 percent. If we lower it further it will make funds holders to leave banks," he said.
He said other countries could make their key interest very low because they could curb inflation low too. ***2***
