Jakarta. Bank Indonesia Governor Perry Warjiyo on Wednesday called on national banks to immediately lower lending and deposit rates, saying the central bank’s monetary easing should be reflected more quickly in the commercial banking sector.

He stressed that aligning commercial lending and deposit rates with monetary easing is crucial to stimulate credit expansion, support the government’s priority sectors, and sustain domestic economic momentum.

Speaking partly in verse, Perry reminded banks that Bank Indonesia (BI) has already reduced its policy rate by 150 basis points since September 2024, bringing the BI Rate down to 4.75 percent.

“The sooner, the better,” Perry said at a press conference in Jakarta, referring to the pace of rate cuts among commercial banks. “If credit growth accelerates and lending rates decline faster, Bank Indonesia will provide further incentives.”

He noted that priority sectors eligible for credit incentives include agriculture, downstream mineral industries, the creative economy, construction, real estate, and small and medium enterprises (SMEs) -- all of which are central to the government’s economic growth agenda.

Commercial Banks Slow to Respond
Bank Indonesia Deputy Governor Aida Budiman said that despite the central bank’s rate cut of 150 basis points, commercial banks have been slow to pass on the easing.

As of September 2025, the average one-month deposit rate had fallen only 29 basis points, from 4.81 percent at the start of the year to 4.52 percent, she said. The slow adjustment was partly due to “special rates” offered to large depositors, who account for 26 percent of total third-party funds in the banking system.

Meanwhile, the Indonesia Overnight Index Average (INDONIA) -- the benchmark unsecured overnight interbank rate -- has fallen 204 basis points since the start of the year to 3.99 percent as of October 21, 2025.

The yields on Bank Indonesia Rupiah Securities (SRBI) have also declined sharply: the six-month, nine-month, and twelve-month tenors dropped by 251, 254, and 257 basis points, respectively, to 4.65 percent, 4.67 percent, and 4.70 percent as of October 17, 2025.

Government bond yields have shown similar trends. The two-year government bond yield has fallen 218 basis points, from 6.96 percent at the start of 2025 to 4.78 percent as of October 21, while the ten-year yield has dropped 132 basis points, from a peak of 7.26 percent in mid-January to 5.94 percent.

Despite these substantial declines, Aida said commercial lending rates remain sticky, warning that banks must act faster to support growth.

“Lending rates have fallen even more slowly -- by only 15 basis points, from 9.20 percent at the start of 2025 to 9.05 percent in September,” she said.

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