Jakarta, 3 September 2014 - Bank Mandiri lowered its deposit interest rate by 25 basis points (bps) to 6.0% in September 2014 from 6.25% the previous month.

Bank Mandiri CEO Budi G. Sadikin said that the Bank had lowered the rate as it had achieved a stronger liquidity position that allowed it to support growth in lending and other productive assets in line with its 2014 targets. In addition, he said, liquidity in the Rupiah money market is now much better than before Idul Fitri.

He said that tight interbank liquidity was very pronounced ahead of the holiday period as each bank sought to satisfy its customers' liquidity needs. Meanwhile, the fact that the Rupiah funds rate is expected to remain stable in the immediate future had persuaded Bank Mandiri to lower its deposit rate.

"We would have to bear a considerable interest burden if the interest rate remained high. In addition, high interest rates make the competition for funds in the banking sector tighter," Budi Sadikin said in Jakarta on Wednesday (3 Sept).

As of June 2014, third party funds in deposited in Rupiah and foreign currency accounts contributed approximately 36.11% of the Bank's total third-party funds of Rp 501.34 trillion.

Budi said that the cut in the interest rate would also lead to a fall in lending rates, thereby helping to reduce loan risks and strengthen intermediation so as to support the growth and development of the national economy.


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