Indonesia eyes 9 percent in loan growth in 2021

Jakarta (VNA) – Bank Indonesia (BI) sees bank lending to expand by 7 - 9 percent next year on the back of low-interest rates and recovery in the economy, according to its Governor Perry Warjiyo.

According to reports of the central bank, lending shrunk by 0.5 percent in the first 10 months this year from the same period last year, in line with the slowdown in business activities and weak consumer demand amid the COVID-19 pandemic.

Consumers and companies alike clang to their cash, as evident in the 12 percent growth of the third-party funds in local banks in the Jan-October period, the bank said

Perry said the national economy has increased as the government is easing the restriction to curb the health crisis.

Other indicators also show improvement. Inflation rose slightly to 1.59 percent in November from 1.44 percent a month earlier, reflecting an increase in consumer demand. Foreign exchange reserves continued to increase, while the current account deficit declined, and foreign capital flowed into Indonesia.

Those indicators encouraged BI to cut its benchmark rate by 25 basis points last month to only 3.75 percent - the lowest in history./.