Bank Indonesia Raises Rate by 50 Bps to Stabilize Rupiah; State and Private Banks Show Support

(Central News Agency, reporter Luo Wei-chia, Jakarta, 21st) Bank Indonesia held a monetary policy meeting yesterday and announced a 50 basis point (0.5%) hike in its benchmark interest rate to 5.25%. Indonesian media reported today that senior executives from representative local state-owned and private banks have expressed their support, emphasizing that the domestic banking industry is already well-prepared for various policy scenarios. Kompas reported that Ramon Armando, Corporate Secretary of the state-owned Indonesia National Savings Bank (BTN), which specializes in real estate finance, pointed out that the financial industry has a comprehensive risk management system and regularly conducts stress tests for interest rate hikes. He said that the National Savings Bank will continue to focus its strategy on strengthening its low-cost current and savings deposit structure to ensure high operational funding efficiency. Dhanny, Corporate Secretary of the state-owned giant Bank Rakyat Indonesia (BRI), the largest bank by assets in Indonesia focusing on micro-inclusive finance, stated that domestic fundamentals remain strong. He said that BRI will balance business promotion with maintaining loan quality, strictly control funding costs by optimizing its low-cost fund structure, adhere to prudent principles, and adopt a selective growth strategy that prioritizes lending to its core of micro, small, and medium enterprises. Wisnu Sunandar, Corporate Secretary of Bank Syariah Indonesia (BSI), a state-owned bank with a leading market position in assets, believes this decision will contribute to medium and long-term financial stability. He explained that as of March this year, BSI's total customer deposits reached 376.8 trillion Indonesian Rupiah (approximately NT$753.6 billion), an 18% year-on-year increase, with total financing at 329 trillion Indonesian Rupiah (approximately NT$658.0 billion), and its asset quality is robust. As Indonesia's largest and most important private financial leader by market capitalization, Hera F. Haryn, Executive Vice President of Bank Central Asia (BCA), pointed out that the central bank's rate hike is a strategy to respond to global economic dynamics. As of April this year, BCA's total loans reached 965 trillion Indonesian Rupiah. Facing the rate adjustment, the bank will continue to closely monitor macroeconomic parameters, market risks, and industry liquidity developments. Hera emphasized that BCA remains optimistic about achieving its full-year credit growth target and commits to regular assessments in the future, maintaining lending rates at a reasonable level that is acceptable to the market and considerate of public purchasing power.