Economics
Indonesia Consumers Enjoy Cheap Loans Even After Rate Hikes
- Banks opt not to pass on 175 basis points of rate increases
- Loan growth jumps as consumer lending rates continue falling
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Indonesia’s central bank raised interest rates six times this year, yet consumer lending rates are still falling in Southeast Asia’s biggest economy.
Between May and September, when Bank Indonesia raised its benchmark rate by 150 basis points, average rates for consumer loans fell by 44 basis points to 11.9 percent, according to the most recent data from the nation’s Financial Services Authority. Rates for investment loans rose only 25 basis points.