Underwriting Interest Rate Cut By 25 Basis Points
Tuesday, 13 February, 2007 | 14:36 WIB

TEMPO Interactive, Jakarta: The Savings Underwriter Institution has cut the underwriting interest rate by 25 basis points. The interest rate previously was 9.50 percent, decreased to 9.25 percent.

Executive Head of Savings Underwriter Institution Krisna Wijaya was informed that the decision was affected by Bank Indonesia's policy. Last week, the central bank has cut the interest rate by 25 basis points, from 9.50 percent to 9.25 percent.

He said that the improving macro economics was one of the reasons for the institution to cut the underwriting interest rate. “The inflation and rupiah exchange rate are standing at stable levels,” said Krisna yesterday (02/12).

The Board of Commissioners' meeting today (02/13) will also agree to cut the interest rate of bank perkreditan rakyat (people's bank for disbursing credit)--from 13.25 percent to 13 percent. In addition, savings interest rate in US Dollars will not alter, that of 4.75 percent.

According to Krisna, the decrease of the underwriting interest rate is expected to be able to boost the growth of banking credit this year. Credit growth is also backed up by third-party funds and the high banking liquidity. Moreover, the qualifications that banking had proposed in disbursing credit were still loose. “However, it doesn't mean that the facilities ignore the principles of caution. Perhaps, some regulations should be re-examined,” he said.

On the other side, he said he hoped that banking was capable of creating more innovative products to elevate credit growth this year. The reason was that without readjustment, he was concerned that the target of banking credit was hard to achieve.

Senior economist at PT Bank Negara Indonesia, Ryan Kirnanto, was not fully agreed with Krisna's opinion. According to him, at least credit disbursement was not triggered by Bank Indonesia and banking's policies. “It was real sector players that are awaiting the implementation of the government policies up until now,” he said. The policies include investment, fiscal, customs, manpower, and regional regulations.

SURYANI IKA SARI