Indonesia's Benchmark Interest Rate Among Top Five Highest in ASEAN in March 2023

Bank Indonesia (BI) held its benchmark interest rate, the BI-7 Day Reverse Repo Rate (BI7DRR), steady at 5.75% in March 2023. This marks the second consecutive month that the central bank has maintained the benchmark rate.

“This decision is consistent with a pre-emptive and forward-looking monetary policy stance to ensure the continued decline in inflation expectations and future inflation,” said BI Governor Perry Warjiyo, as quoted from a press release on Thursday (March 16, 2023).

BI is optimistic that the 5.75% BI7DRR is sufficient to keep core inflation within the range of 3.0% plus or minus 1% in the first half of 2023.

Previously, BI had raised its benchmark interest rate by 225 basis points (bps) from August 2022 to January 2023.

According to Trading Economics data, BI's current interest rate is the fifth highest in ASEAN. Laos holds the top spot, with its central bank interest rate at 7.5%.

Myanmar is ranked second with a benchmark interest rate of 7%. This is followed by the Philippines and Vietnam with benchmark interest rates of 6% each.

Below Indonesia is Brunei Darussalam with an interest rate of 5%. The benchmark interest rates for the central banks of Singapore, Malaysia, Thailand, and Cambodia are 3.6%, 2.75%, 1.5%, and 0.85%, respectively.

On the other hand, the benchmark interest rate data for Timor Leste, which has been an ASEAN member since November 2022, is not available on the Trading Economics website.

The ASEAN Summit 2023 will be held in Labuan Bajo, East Nusa Tenggara in May 2023. Indonesia, as the host, will discuss several priority issues, including food security, financial stability, energy security, and health.