Indon banks urged to cut interest

The Indonesian Banker's Association urged local banks to cut their interest rates to stimulate economic growth. The current central bank interest rate stood at 7.25 percent. A counter rate for a regular current account at Bank Mandiri was at 6.75 percent, while loan interest was over 4 percent higher than the regular account interest.

The central bank has reduced its key interest rate by 1.25 percent since the beginning of the year.

Head of Research and Publication of Indonesian Banker's Association Budi Gunadi said on Wednesday banks should immediately cut rates for deposit accounts and loans interest.

Banks should not worry over liquidity as money supply, according to the association, is at sufficient amount.