INDONESIA - BANKING - Adjust the Profit Sharing Islamic Banking with BI Rate

REPUBLIKA, JAKARTA --- Decrease in interest rates of Bank Indonesia (BI) requires that a recent decline in margins in Islamic banking. This margin decline primarily for transactions conducted with murabaha contract.

Previously BI rate has been lowered to a level of 6 percent. The decline was not only the conventional banks to lower lending rates. Islamic banks which have a fixed margin for murabaha financing should also start counting again.

According to the Director of the Directorate of Islamic Banking BI, Mulya Effendi Siregar, Islamic banks have to make adjustments to financing such as murabaha with fixed margins after interest rates fell. (source)