Rate Hike Will Not Put Pressure on Banks: BI Governor

Jakarta (Antara) - Bank Indonesia governor Agus Martowardojo has expressed belief that the hike in the central bank's benchmark rate, from 6.5 percent to 7.0 percent, will not put undue pressure on the country¿s banks. He revealed here on Friday that Indonesian banks had already been stress-tested and it was found that their fundamentals were strong, unlike many of their counterparts in other countries. "Our banks have high capital adequacy ratio, low non-performing loans, and sufficient liquidity," Agus stated, when approached to comment on the BI Rate hike at the central bank¿s compounds. When asked about the possible impact of the rate hike on bank credit growth, he said the hike was likely to have a direct impact on many banks. "The hike will perhaps most affect those banks that are growing at a fast pace. Other banks already know that their credit growth rate will not exceed 20 percent," Agus pointed out. He also noted the bank credit growth itself was on a declining trend, rising at 19.6 percent in the year to mid-August. "Slow credit growth follows by slow economic growth," Agus said. However, he added, the central bank and the government will continue to make joint efforts to improve the economic condition of Indonesia. (*)