Chief of the Board of Commissioners of LPS Halim Alamsyah said with rising trend in general and inflation under control, demand for credit is expected to increase in 2018.
"Currently most banks put large funds in Bank Indonesia, but when the condition improves, the business confidence will also improve, the purchasing power will increase, demand for credits will be stronger," Halim said here on Thursday (Sept 14).
He especially expects stronger demand for credits from companies producing export commodities as the markets have improved abroad with the revival of the U.S., Japanese and European economy as the main traditional markets for Indonesian commodities.
"We believe a number of our commodities are still competitive. What we are worried about is our capability to meet the growing demand," he added.
Earlier, Bank Indonesia predicted that credit growth would average 12-14 percent in 2018. The Financial Service Authority (OJK) predicted lower growth of 11-12 percent in 2018.
Last month, the Central Bank cut its 7-day Reverse Repo Rate by 25 basis points from 4.75 percent to 4.5 percent hoping to support sustainable growth especially credit growth.
LPS also has decided to cut its insurance interest rate on rupiah deposits in banks from 6.25 percent to 6 percent. The insurance interest rate on deposit at Peoploe's Credit Banks (BPR is cut from 8.75 percent to 8.5 percent. The insurance interest rate on deposits in foreign exchange is unchanged. (*)
Editor: Vicha Faradika