Indonesia's central bank - Bank Indonesia (Photo: AP)Hanoi (VNA) – The central banks of Indonesia and thePhilippines on September 27 decided to raise interest rates, following thesimilar move by the US’ Federal Reserve.
The Indonesian central bank, Bank Indonesia, decided to raise itsseven-day reverse repo rate by 25 basis points to 5.75 percent,its fifth rise since May.
The hike extended the tightening cycle applied by the central bank withthe total rate hike of 150 basis points since May 17, a move aiming at paringdown the country’s capital outflows.
The capital outflows have slid rupiah about 9 percent against the USdollar this year, by far, standing at 14,910 per one USD after the lending ratehike on September 27.
The move came along with the government's policy to swiftly drift upimport tariffs on over 1,000 items and put off construction of biginfrastructure projects to bring down imports as well as extended usage ofbio-fuel which is looked to edge off oil import.
The same day, the Bangko Sentral ng Pilipinas raised key interest ratesfor the fourth time this year as it aims to tame inflation that has spiked to anine-year high and shore up its tumbling currency.
The central bank of the Philippines pumped the brakes this time with a50 basis point hike to 4.5 percent, as worries grow that the nation's economyis overheating.
The country’s consumer prices hit a nine-year high to 6.4 percent inAugust, with some analysts warning the September data, due out next week, couldtop 7 percent.
The destruction wrought earlier this month by Typhoon Mangkhut, 2018'smost powerful storm so far, is expected to further push up prices because ofwidespread damage to key agricultural areas.
The central bank also said the latest rate hike should help reducefurther risks to inflation, including exchange rate volatility.
The Philippine peso has been hovering at 13-year lows, hitting 54.12pesos per USD late on September 27.-VNA
