BUMNs To Transfer Deposits To Long-Term Instruments

Jakarta (Antara Bali) - State Enterprises Minister Dahlan Iskan is encouraging big state-owned companies (BUMNs) to place their funds in long-term instruments to support Bank Indonesia in its efforts to improve efficiency in the banking industry.

"BUMNs have huge funds but they have so far been put in time deposits. The short-term funds should have been put in long-term instruments," he said here on Wednesday.

He said the plan to put BUMN funds in long-term instruments had been approved by President Susilo Bambang Yudhoyono.

"We have conveyed the idea to the President and he has directed to immediately carry it out," he said.

He said priority to transfer of  deposits to  long-term instruments would first be given to BUMNs that had good financial conditions and strong liquidity.

"The program is part of the role played by BUMNs for the national economy," he said.

He said sacrifices indeed had to be made by all businesses both owned by the state or private parties to boost the economy.

"Although income from interest will drop because of the transfer it is the obligation of BUMNs to support the state in its efforts to advance the economy," he said.

Bank Indonesia governor Darmin Nasution earlier said the interest rate on deposits in Indonesia right now was the highest in the ASEAN region.

To increase efficiency Darmin said the central bank would review the rate of interest on savings in the country.(IGT/T007)