Inflation Under Control Needed to Cut Lending Rate: Darmin

Jakarta (Antara Bali) - Chief Economic Minister Darmin Nasution said controlling inflation within target is needed to cut bank lending rates.

"The government will take necessary steps to keep the inflation around four percent this year," Darmin said after an economic meeting here on Monday.

He said if the inflation could be kept under control, the Central Bank could be expected to take steps to cut the bank lending rates.

It was agreed at the meeting that the finance ministry and the ministry of state enterprises (BUMN) would communicate with major banks that they would not ask for special rate that cost of fund would weigh on banks, he said.

"It is not necessary to issue regulation. They need only to communicate with major banks that special rate does not have to be used on BUMN funds," he said.

He said the meeting also agreed that OJK would set ceiling on lending rate and monitor that no special rate would be used.

OJK would offer incentive but there would be punishment for any breach of the agreement, he added.
The Saving Insurance Agency (LPS) would be asked to take the necessary step by in line with the policy of the finance ministry, he explained.(WDY)