Interest rates have decreased, investment has not increased !

banking khabar / Despite the continuous decrease in interest rates in banking, the flow of credit has not been seen much. This clearly shows that investors are reluctant to invest. Due to this, the economy which has been continuously declining after the covid does not show any signs of recovery. The government has also held an investment conference with pomp and circumstance.
The interest rate of bank finance is also cheap. However, investors are silent. What could be the specific reason?
One side has shown the various relaxations in the economy due to the lack of real estate transactions, while the other side has shown the problems in the cooperative sector. Apart from these two reasons, what can be the other reasons. Now the interest of bank finance is very cheap. The interest rate of bank finance is currently around 8 to 9 percent. A single point drop in loan interest is a very good sign for investment. However, even in this situation, the economy does not seem to be running.
Even though the central bank has drawn liquidity several times to increase the interbank rate, the interest rate has decreased further. Due to the slowdown in economic activity, the demand for loans in banks and financial institutions is low. Due to the improvement in remittances, deposits in financial institutions have increased, while credit investment has remained stable.
Open in Google Tran Because of that, the problem of excessive liquidity in the financial system is deepening. When there is excessive liquidity in the financial system, abnormal fluctuations in short-term interest rates occur, the central bank works to attract liquidity and stabilize interest rates through permanent deposit facilities and deposit collection.