Thaindian News

Jajarta, Dec 12 (IANS) Indonesian central bank has asked commercial banks in the country to lower their interest rates as the country will rely much on its domestic consumption to boost economic growth, central bank governor Darmin Nasution has said here.

Darmin made the call as the Indonesian government has been struggling to ease the risks of global economic uncertainty due to slowing US economic growth and Europe debt crisis, reported Xinhua.

“This is clearly not a short-term issue, it’s a medium-term problem. But we cannot be weary of reminding and fighting for (lower lending rates),” Darmin was quoted by the Jakarta Post as saying Monday.

The central bank has cut rate by 75 basis points in September and October after keeping it unchanged for more than two years, aiming at fighting inflation and spurring economic growth. The bank expected the move would be followed by commercial banks in the country.

Darmin said that next year’s lending growth would remain robust at up to 25 percent like this year despite global economic woes.

The central bank started with the “prime lending rate” policy earlier this year, which requires banks to publicly announce the rates they charge their most valued customers, also called base lending rate.

The policy is aimed at increasing transparency so that customers can choose the best rates, boosting competition in the lending market, which in turn is expected to lower lending rates.