JAKARTA, May 20 (Reuters) - Indonesia lifted its 10-year bond yield assumption for 2023 to between 7.34% and 9.16%, finance minister Sri Mulyani Indrawati said in a speech to parliament on Friday, amid a recent spike in yields and pressure on the rupiah currency.
The finance ministry in April forecast the 2023 average 10-year bond yields would range between 6.65% and 7.77%.
The new bond yield range assumption is among several economic indicators the minister has adjusted ahead of the 2023 budget discussion with parliament.
Sri Mulyani also changed the assumption for average 2023 rupiah exchange rate to between 14,300-14,800 to a dollar, compared with the 13,800-15,000 range given in April, and raised the crude oil price assumption to $80-$100 a barrel, from $65-$75 a barrel previously.
The 2023 economic growth target was kept at 5.3%-5.9%, but the finance minister changed the budget deficit forecast slightly to between 2.61% and 2.9% of GDP, from the 2.81%-2.95% of GDP forecast a month earlier.
Indonesia's benchmark 10-year bond yield rose to its highest in two years at 7.496% this week, before retreating, amid capital outflows linked to U.S. monetary tightening and rising domestic inflation.
The rupiah has also been under pressure for much of the past two weeks, but it gained 0.4% on Friday after the government announced it would lift a ban on palm oil exports starting Monday.
During her speech to parliament, Sri Mulyani also warned of the impact of global monetary tightening and potential stagflation on Southeast Asia's largest economy.
"We must watch out for the spillover impact from global monetary policy tigthening, especially with the increase of cost of funds, for the state budget and for the corporate sector," she said, adding that Indonesia's economic recovery remained "at an early stage and fragile". (Reporting by Stefanno Sulaiman and Gayatri Suroyo; Editing by Kanupriya Kapoor)
