Indonesia consumers enjoy cheap loans even after rate hikes

Perry Warjiyo, Indonesia's new central bank governor, speaks to members of the media following his inuaguration in Jakarta, Indonesia, May 24, 2018. REUTERS

JAKARTA: Indonesia’s central bank raised interest rates six times this year, yet consumer lending rates are still falling in South-East 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%, according to the most recent data from the nation’s Financial Services Authority. Rates for investment loans rose only 25 basis points.