Bank of Indonesia (BI) decides to raise interest rates Lending Facility by 50 basis points (bps). Similarly, banks are expected to meet the shortage of liquidity through the financial markets before knocking on the door of the central bank loans. "Lending Facility interest rates rose by 50 bps to 8%, and interest rates Deposit Facility remains at 5.75%," said the central bank governor Agustin DW Martowardojo, in the Bank Building, Jakarta, Tuesday, November 18, 2014.
Through this policy, the central bank hopes the industry can meet its liquidity needs through the interbank money market (interbank). This is indicated by not raising Depocit Facility that banks with excess liquidity does not necessarily incorporate the excess funds to BI. None of the Lending Facility, which is raised above the BI rate, so expect the bank to look for cheaper funds in the money market.
"Lending Facility and Deposit Facility is adjusted so that the bank corridors not rush to put BI if the excess, and borrow if deficiencies. With more expensive Lending Facility 50 bps, liquidity can be met through inter-bank transactions. So there is a deepening of financial markets, "said Deputy Governor of BI Hendar.
JK said that interest rate of Indonenesia Bank are too high compared with Chinese Bank. How about that ?
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