Benchmark Interest Rate Cut, Foreign and Mixed Bank Investment Credit Rates Fall Most Sharply

Bank Indonesia (BI)'s policy of cutting the BI 7-Day Reserve Repo Rate benchmark interest rate over the past two years to 3.5% has successfully suppressed bank lending rates. The average investment credit interest rate for foreign and mixed-ownership banks is the lowest among all bank groups, at 6.3% per annum.

This figure is 214 basis points (bps) lower than the average investment loan interest rate for general banks. According to data from the Central Statistics Agency (BPS), the average investment loan interest rate for general banks stood at 8.44% per annum in November 2021. This figure is down 44 basis points (bps) compared to December 2020.

Meanwhile, the next highest investment credit interest rate is for Regional Development Banks (BPDs), reaching 9.49%. This is followed by State-Owned Banks (Bank BUMN) at 8.54%, and then private national banks at 8.35%.

Compared to December 2020, the investment credit interest rate for foreign and mixed-ownership banks saw the sharpest decline, at 94 bps. This was followed by BPDs at 91 bps, then private national banks at 46 bps, and State-Owned Banks at 33 bps.