Relation Between Bi Rate and Banks Interest Rate
A. BI rate
We take the BI rate, as the variable being estimated, from the period of 2006 until 2012. We then take the average rate in each year, rather than taking the rate in each month. As a note to the year 2012, we take the average rate that ranges only from January until August.
Figure 1. BI rate (Percent per Annum)
Source :
Indonesian Financial Statistics, Bank of Indonesia, http://www.bi.go.id/web/en/Statistik/Statistik+Ekonomi+dan+Keuangan+Indonesia/Versi+HTML/Sektor+Moneter/
Year  BI rate (%)
2006 9.750
2007 8.000
2008 9.250
2009 6.500
2010 6.500
2011 6.583
2012* 5.781
 
*JanuaryAugust 
Figure 2. yearly average of BI rate
B. Lending Rate
We take the banks lending rate, as the first estimating variable, from the period of 2006 until 2012. We then take the yearly average on each year, by combining all the lending rate given by each type of loan in each year. As a note to the year 2012, we take the average rate ranging only from January until August.
Figure 3. Interest rates of rupiah loans by group of banks (percent per annum), continued Source :
Indonesian Financial Statistics, Bank of Indonesia, http://www.bi.go.id/web/en/Statistik/Statistik+Ekonomi+dan+Keuangan+Indonesia/Versi+HTML/Sektor+Moneter/
Figure 4. Interest rates of rupiah loans by group of banks (percent per annum) Source :
Indonesian Financial Statistics, Bank of Indonesia, http://www.bi.go.id/web/en/Statistik/Statistik+Ekonomi+dan+Keuangan+Indonesia/Versi+HTML/Sektor+Moneter/
Year Lending rate
2006 16.519
2007 14.941
2008 16.126
2009 15.656
2010 14.517
2011 13.723
2012* 13.172
 
Figure 5. yearly average of banks interest rate (*JanAug) C. Deposit Rate
We take the banks deposit rate, as the second estimating variable, from the period of 2006 until 2012. We then take the yearly average on each year, by combining all the deposit rate given by each type of bank in each year. As a note to the year 2012, we take the average rate ranging only from January until August.
Figure 6. Interest rates of saving deposits in rupiah by group of banks (percent per annum) Source :
Indonesian Financial Statistics, Bank of Indonesia, http://www.bi.go.id/web/en/Statistik/Statistik+Ekonomi+dan+Keuangan+Indonesia/Versi+HTML/Sektor+Moneter/
Year  Deposit rate
2006 4.456
2007 3.588
2008 3.916
2009 3.446
2010 3.313
2011 2.505
2012* 2.023
 

Figure 7. yearly average of deposit rate(*JanAug)
D. Regression Analysis
Shown below in Figure 8, is the summary of Figure 2, 5, and 7. BI rate is the variable being estimated, that is, Y. Lending rate as the first estimating variable, X1. And Deposit rate as the second estimating variable, X2. Year  BI rate (%)  Y Lending rate  X1 Deposit rate  X2 2006 9.750 16.519 4.456
2007 8.000 14.941 3.588
2008 9.250 16.126 3.916
2009 6.500 15.656 3.446
2010 6.500 14.517 3.313
2011 6.583 13.723 2.505
2012* 5.781 13.172 2.023
Figure 8. The summary(*JanAug)
And the following is the complete summary output of regression analysis with seven obervations (20062012*), based on the data depicted on Figure 8. Regression Statistics     
Multiple R 0.8669    
R Square 0.7515    
Adj. R Square 0.6272    
Standard Error 0.9382    
Observations 7    
     
ANOVA     
 df SS MS F Significance F
Regression 2 10.6459 5.3229 6.0473 0.0618
Residual 4 3.5209 0.8802  
Total 6 14.1668   
     
 Coefficients Standard Error t Stat Pvalue Partial F Intercept 2.1859 11.3019 0.1934 0.8561 0.0374
Lending...
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