LPS plans to lower guaranteed interest rate to help economy
Jakarta (ANTARA) – The Indonesian Deposit Insurance Corporation (LPS) is considering lowering the guaranteed interest rate to support economic growth, said chairman of its board of directors, Purbaya Yudhi Sadewa.
“We will continue to assess our financial system and LPS still has room to lower the guaranteed interest rate even further,” he said on Friday at a press conference organized by the Financial System Stability Committee. (KSSK).
The guaranteed interest rate for savings in rupees is currently 4% in commercial banks and 6.5% in rural banks (BPRs), and 0.5% for foreign currency savings in banks. commercials, Sadewa noted.
Lowering the guaranteed interest rate below 4% will support economic growth as it would reduce interest on bank deposits, he explained.
According to Sadewa, lower interest rates will encourage clients with large funds who enjoy high interest rates and are reluctant to start spending.
Related News: Increasing Financial Literacy for Greater Financial Stability: LPS
Such spending would support the economy and lower class citizens would also benefit from its positive impact, he added.
“The economy will run even faster. It will support economic growth,” Sadewa said.
In the first half of 2021, the LPS lowered the guaranteed interest rate by around 50 basis points for savings in rupees in commercial banks as well as rural banks and by 50 basis points for savings in foreign currencies in commercial banks, he noted.
In addition to lowering the guaranteed interest rate, LPS also supports the country’s economic growth by helping to increase financial literacy and inclusion, which can foster the development of deep financial markets, he said.
To this end, the LPS works with various stakeholders, including mass media, to disseminate information and strengthen financial literacy, he added.
Related News: LPS Urges Banks To Lower Lending Rate