INDONESIAN BANKS MAY CUT INTEREST RATES TO 10%

JAKARTA - Banks could cut their corporate credit interest rates to as low as 10 per cent in the second half of this year to follow the lead by the central bank, a senior banker said.

The steady cut in Bank Indonesia benchmark interest rate (BI Rate) and improving economic condition would allow banks to offer cheaper credits, Sudargo Sudaryanto, the corporate director of state lender Bank Rakyat Indonesia (BRI) (JSX:BBRI) said.
Currently the interest rate on corporate credit offered by BRI ranges from 12 per cent-23 per cent, Sudargo said.

In the past several months BRI already cut its interest rates by 50 basis points every month, he said, adding, the bank hopes to be able to continue the policy to encourage borrowers.

The bank has large undisbursed loans, he was quoted as saying by the newspaper Investor Daily without giving figure.

Meanwhile, Krishna Suparto, corporate director of PT Bank Negara Indonesia (BNI) (JSX:BBNI), another state lender, said if the BI Rate is cut further to 6 per cent from 6.75 per cent at present, BNI would be able to offer cheaper credit at an interest rate of 10 per cent.