JAKARTA. The banks are likely to struggle to boost the credit allocation in this year, due to the liquidity squeeze. This reflects on the increasing loan to deposit rate (LDR). Financial Service Authority (FSA) expects that as of the end of 2016, the LDR may even hit 93.09% or above the safety limit of 92%. In referring to banks’ business plan (RBB), the FSA expects that the LDR in 2017 will even higher at the level of 94.18%, which reflects a liquidity squeeze. The liquidity squeeze might be caused by the target of credit growth, which was higher than the third party funds. According to the FSA, the data of RBB showed that in average the credit and third party funds grew by 13.25% and 11.94%, respectively.
Banks facing liquidity squeeze
JAKARTA. The banks are likely to struggle to boost the credit allocation in this year, due to the liquidity squeeze. This reflects on the increasing loan to deposit rate (LDR). Financial Service Authority (FSA) expects that as of the end of 2016, the LDR may even hit 93.09% or above the safety limit of 92%. In referring to banks’ business plan (RBB), the FSA expects that the LDR in 2017 will even higher at the level of 94.18%, which reflects a liquidity squeeze. The liquidity squeeze might be caused by the target of credit growth, which was higher than the third party funds. According to the FSA, the data of RBB showed that in average the credit and third party funds grew by 13.25% and 11.94%, respectively.