REPUBLIKA.CO.ID, JAKARTA - Two largest Indonesian commercial banks are still in doubt to hike interest rates after Bank Indonesia increased its benchmark from 5,75 percent to 6 percent. Those banks, Bank Mandiri and Bank Central Asia (BCA) choose to wait and see attitude. 

"For now, BCA will wait and see. We previously has pressed lending by increasing the deposit rate from 3.25 percent to 5 percent per May 1 2013. If the lending remains tight, we will rise the interest rate, but not now," President Director of BCA, Jahja Setiaatmadja said on Monday.

Bank Mandiri are still monitoring the impact of BI rate by looking at the condition of cost of funds. Chief Economist of Bank Mandiri, Destry Damayanti, said the short-term impact of the BI rate increase were the increase the cost of fund and many banks would be more cautious in lending. However, in medium term with a better economy, banks could grow healthier in the future.

BI will monitor banks which increase the interest rate. Deputy Governor of BI, Halim Alamsyah said  Indonesian banks still had adequate funds since some banks experienced credit expansion more rapid than the growth of depositor funds.

"Banks may react by raising its interest rate credit. For its market share, they can increase deposit interest rate. However, some banks may prefer to reduce its margins to maintain its market share," Alamsyah said. 

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