Banking - LPS maintains deposit insurance interest rate at 4.25%

Banking - LPS maintains deposit insurance interest rate at 4.25% The LPS (Deposit Insurance Corporation) maintained its deposit insurance rate at 4.25% following Bank Indonesia's (BI) benchmark interest rate cut. LPS Chairman Purbaya Yudhi Sadewa stated that the rupiah deposit guarantee rate for commercial banks remains at 4.25%, effective from 1 October 2024 to 31 January 2025. The rate for BPR deposits is 6.75%, while the rate for foreign currency deposits at commercial banks is 2.25% (Source : Kontan) Comment : The LPS decision was in line with our expectations. We believe banks will have sufficient flexibility to manage liquidity, funding costs, and yield. This should support improved NIM expansion for banks in the remaining quarters of this year. We maintain our Overweight rating for banks.