A comparative analysis of interest rate among all ASEAN countries

Abstract

This research conducts a comparative analysis of interest rates among the ASEAN countries, focusing on examining the trends and determinants of interest rates within the region. The study encompasses ten ASEAN countries, exploring the relationships between interest rates and key factors such as economic growth, savings, and unemployment. Literature has proved the correlation of the determinants to the Interest Rates. Panel Regression techniques such as the Hausman Fixed and Random Test (Sigmamore) evaluate its variation and the Breusch and Pagan Lagrangian Multiplier Test that if a regression model exhibits signs of heteroscedasticity. The results indicate a strong association between unemployment rates and real interest rates, while GDP growth shows no significant effect on interest rates. Savings exhibit a negative correlation with real interest rates. The findings support the overall objectives of the study. The insights gleaned from this research provide valuable information for policymakers in crafting tailored economic policies to address the unique challenges and opportunities present across ASEAN countries. By leveraging these findings, governments can make informed decisions to enhance economic stability and productivity.