JAKARTA (Yosefardi) – Bank Indonesia urges banking sector to hold their loan growth and not to aggressively collect public funds by raising interest rates for savings and deposits, as attempt to maintain the sustainability of domestic economic growth.
BI sets loan growth target at 15-17% for next year, inflation target at 4.5% plus minus 1%, and economic growth at 5.8%-6.2%. This year, the economy is expected to grow by 5.7% while loan growth is expected to reach above 20%.
Bank Indonesia has on Tueday (Nov 12) raised its benchmark BI Rate to 7.5% on current account deficit concerns. The central bank said while there were improvements in the trade balance with growing export of non oil and gas products in one hand and declining import of non oil and gas on the other hand, interest rate hike is needed to keep the inflation under control.