The author examines the interest rate issues within the context of the different financial structure and stages of economic growth of the various countries. The study is divided into two parts. The first part contains a description of the current systems and structure of the interest rate systems in SEACEN countries and discusses how the systems have evolved in recent years in particular the interest rate reforms undertaken by the SEACEN countries. The second part is the empirical investigation which estimates equations to examine the effect of interest rates on financial variables.