Indonesian central bank to ease reserve requirement rules in 2017 - governor
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Indonesia's Central Bank Governor Agus Martowardojo speaks to reporters at Bank Indonesia headquarters in Jakarta, Indonesia, November 17, 2016. REUTERS/Beawiharta
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By Gayatri Suroyo and Hidayat Setiaji
JAKARTA (Reuters) - Indonesia's central bank will next year give banks more leeway in meeting day-to-day reserve requirements, to reduce volatility in money-market rates, Governor Agus Martowardojo said on Tuesday.
He told Bank Indonesia's annual bankers' dinner that commercial lenders would have to keep an average 6.5 percent of their total rupiah deposits at the central bank over a period of one or two weeks, rather than having to meet the requirement every day, as now.
Martowardojo said the move should "help banks to absorb temporary liquidity shock so that it will not inflict excessive volatility in interest rates", and that the new rule would be introduced by the second half of 2017.
The pace of lending has dropped in Indonesia this year - despite the BI cutting interest rates by a total of 150 basis points - crimping government and central bank efforts to raise economic growth to above 5 percent.
Jahja Setiaatmadja, president director of Indonesia's biggest lender by market value, Bank Central Asia
Tigor Siahaan, chief executive of Bank CIMB Niaga
Martowardojo also said the BI was planning new rules for companies offering payment services, requiring them to keep all the money for settlement, as well as transaction data, onshore in Indonesian banks.
(Reporting by Gayatri Suroyo and Hidayat Setiaji; Editing by Kevin Liffey)
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