Indonesia Holds Steady on Benchmark Interest Rate; Comparison with G20

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Adi Ahdiat 25/05/2022 13:40 WIB

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Compared to other G20 member countries, Indonesia's benchmark interest rate is at a moderate level. Argentina had the highest benchmark interest rate among G20 countries, at 49% as of May 2022.

Central Bank Policy Interest Rates in G20 Countries (May 2022)

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Indonesia Holds Steady on Benchmark Interest Rate; Comparison with G20

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Central Bank Policy Interest Rates in G20 Countries (May 2022)

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In April 2022, Indonesia's annual inflation reached 3.47%. This is its highest record since the beginning of the pandemic, and even since 2017.

However, until May 2022, Bank Indonesia (BI) decided to maintain the benchmark interest rate, the *BI 7-Day Reverse Repo Rate*, at 3.5%.

"This decision is in line with the need to control inflation and maintain exchange rate stability, while still encouraging economic growth, amid high external pressures related to the Russia-Ukraine geopolitical tension and the accelerated normalization of monetary policy in various developed and developing countries," BI explained in its press release on Tuesday (24/5/2022).

Compared to G20 member countries, Indonesia's benchmark interest rate is at a moderate level, as shown in the graph.

Argentina has the highest benchmark interest rate among G20 countries. In April 2022, the annual inflation rate in the country had reached 58% (yoy). Argentina then raised its benchmark interest rate from 47% to 49% in May 2022.

Next are Russia and Turkey, with central bank benchmark interest rates of 14% each.

According to *Reuters*, inflation in Russia has increased sharply since its invasion of Ukraine at the end of February 2022. By April 2022, Russia's annual inflation had reached 17.83% (yoy), its highest since 2002.

Meanwhile, Turkey recorded an annual inflation of 69.97% (yoy) in April 2022, partly due to rising energy and commodity prices as a result of the Russia-Ukraine war.

During the same period, the United States and the European Union experienced annual inflation in the range of 7%-8% (yoy). However, they still apply relatively low benchmark interest rates, namely in the range of 1% or below.

Here's a breakdown of central bank benchmark interest rates in G20 member countries as of May 25, 2022:

1. Argentina: 49%
2. Russia: 14%
3. Turkey: 14%
4. Brazil: 12.75%
5. Mexico: 7%
6. South Africa: 4.75%
7. India: 4.4%
8. China: 3.7%
9. Indonesia: 3.5%
10. Saudi Arabia: 1.75%
11. Italy: 1.65%
12. South Korea: 1.5%
13. France: 1.28%
14. Germany: 1%
15. United Kingdom: 1%
16. Canada: 1%
17. United States: 1%
18. Australia: 0.35%
19. European Union: 0%
20. Japan: -0.1%

(Also read: BI Holds Interest Rate, Indonesian Inflation Still Relatively Low in G20)

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."