SRIL and PBRX Issue Global Bond

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IKATSI Reveals Details of Import Violations

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Britain Will Ban Imports From China

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Trade Surplus, Textiles Industry Still in the Red Zone

APR Encourages Supply Chains as the Focus of the Road Map

Pakistan's Exports to Indonesia Supported by Textile Products

ARGO Optimistic Will Improve Performance in 2021

APSyFI : PLB Threatens to Eliminate US $ 8.3 Million Yarn Exports

Stake Holder : Textile Industry Needs Fundamental Changes


Bank Indonesia (BI) claims that banking liquidity is still adequate. This condition makes the increase in lending rates not too high, even though BI's benchmark interest rate continues to be adjusted. Based on regulators' monitoring, bank lending rates only increased by 21 basis points (bps) from July to December 2022. Even though BI's benchmark interest rate has increased by 225 bps which was responded by an increase in the bank's 1-month bank deposit rate of 108 bps in December 2022. "Indeed, we ensure that there is excess bank liquidity, that is the reason for the interest rate on credit not rising high. We continue to urge and persuade banks that we guarantee excess liquidity," Perry said on Thursday (19/1).

He said that when there is excess liquidity, deposit rates may not necessarily rise. So that the increase in the benchmark interest rate does not have to be transferred to the banking credit interest rate.

Perry stated that in December 2022, the ratio of Liquid Assets to Third Party Funds (AL/DPK) would remain high at 31.20%. This value increased from the previous month which was recorded at 30.42%.

Nevertheless, in terms of the loan to deposit ratio (LDR), there has been a slight tightening in banking from 77.13% in December 2021 to 79.6%. BI will continue to maintain the minimum reserve requirement (GWM) at the level of 9%.

Regulators consider it better to provide incentives from a portion of the GWM for bank lending. Through this relaxation, BI estimates that there will be additional liquidity in the banking system of around IDR 118 trillion.

This GWM incentive BI provides to banks that extend credit to priority sectors that have not yet recovered, People's Business Credit (KUR), and green credit. This relaxation will take effect from 1 April 2023.

In detail, the GWM reclassification for lending to 46 priority sub-sectors which includes three business sector groups. Namely the resilience group, the growth driver group, and the slow starter group.

For this group, BI spread incentives for Slow Starter to remain at least 1%, and increased the threshold for the resilience and growth driver groups from a minimum of 1% to a minimum of 5% and 3% respectively.

BI sees that there are still several sectors whose credit growth is still relatively low. There are 4 sectors, there are air transportation, hotels and restaurants, as well as textiles and footwear.

"For this slow growth sector, we will push it further with a higher GWM incentive allocation," said Perry.

Then, BI doubled the amount of GWM incentives for KUR channeling banks and MSME loans to a maximum of 1%. Accompanied by the addition of bank groups based on achieving Macroprudential Inclusive Financing Ratios (RPIM) above 30% - 50% and above 50%.

As for incentives from KUR and MSMEs, which previously received additional liquidity from GWM of IDR 16 trillion, BI doubled it to IDR 32.7 trillion.

Main Director of Bank BJB Yuddy Renaldi stated that this GWM relaxation policy would really help banks, especially those that needed additional liquidity. Because there will be additional liquidity so that it can be used for lending.

"Currently, for BJB, liquidity is still quite loose. However, this relaxation has also helped us to ease interest rate pressures," he said.

According to him, when the benchmark interest rate rises, the demand for KUR will increase. Because it provides business capital with cheaper interest. He said BJB received an increase in the 2023 KUR allocation to IDR 3 trillion.