Indonesia’s central bank raised its key interest rate by 25 basis points yesterday following a spike in inflation caused by a government increase in the price of fuel.
Bank Indonesia’s third rate rise in three months took the benchmark rate to 8.75 percent and came as surging prices across Asia force the region to contemplate unpopular increases in borrowing costs.
“Bank Indonesia will continue to implement flexible, cautious and measured policies to tame inflation,” its governor Boediono said following the central bank’s policy meeting.
He said inflation could range between 11.5 percent and 12.5 percent by year’s end, before easing off to between 6.5 percent and 7.5 percent by the end of next year.
A 28.7 percent average jump in fuel prices in May and surging costs for food staples pushed year-on-year Indonesian inflation to 11.03 percent last year, official figures showed on Tuesday.
The year-on-year number was lower than forecasts of more than 12.5 percent because of a re-weighting of the figures to cut the impact of food prices. But the monthly rise from May was still the fastest in almost two years.
The stock market had factored in the rates rise and barely reacted to the bank’s move, but analysts expect that borrowing costs could rise as high as 9.5 percent by September.
The central bank’s move comes as Asia struggles to curb inflation amid record-high world crude oil prices and soaring food costs.
India recently moved to cool credit growth, raising its key short-term lending rate by half a percentage point after inflation hit a 13-year high of more than 11 percent.
Predictions that inflation figures to be released in the Philippines today could reach double figures have also raised expectations of a rate rise there.
The Central Weather Administration (CWA) yesterday said it expected to issue a sea warning for Typhoon Fung-Wong tomorrow, which it said would possibly make landfall near central Taiwan. As of 2am yesterday, Fung-Wong was about 1,760km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, moving west-northwest at 26kph. It is forecast to reach Luzon in the northern Philippines by tomorrow, the CWA said. After entering the South China Sea, Typhoon Fung-Wong is likely to turn northward toward Taiwan, CWA forecaster Chang Chun-yao (張峻堯) said, adding that it would likely make landfall near central Taiwan. The CWA expects to issue a land
The Central Weather Administration (CWA) yesterday said it is expected to issue a sea warning for Typhoon Fung-wong this afternoon and a land warning tomorrow. As of 1pm, the storm was about 1,070km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, and was moving west-northwest at 28 to 32kph, according to CWA data. The storm had a radius of 250km, with maximum sustained winds of 173kph and gusts reaching 209kph, the CWA added. The storm is forecast to pass near Luzon in the Philippines before entering the South China Sea and potentially turning northward toward Taiwan, the CWA said. CWA forecaster Chang Chun-yao (張峻堯) said
PREPARATION: Ferry lines and flights were canceled ahead of only the second storm to hit the nation in November, while many areas canceled classes and work Authorities yesterday evacuated more than 3,000 people ahead of approaching Tropical Storm Fung-wong, which is expected to make landfall between Kaohsiung and Pingtung County this evening. Fung-wong was yesterday morning downgraded from a typhoon to a tropical storm as it approached the nation’s southwest coast, the Central Weather Administration (CWA) said, as it issued a land alert for the storm. The alert applies to residents in Tainan, Kaohsiung, Pingtung and Taitung counties, and the Hengchun Peninsula (恆春). As of press time last night, Taichung, Tainan, Kaohsiung, and Yilan, Miaoli, Changhua, Yunlin, Pingtung and Penghu counties, as well as Chiayi city and county had
The Central Weather Administration (CWA) yesterday issued a sea alert for Typhoon Fung-wong (鳳凰) as it threatened vessels operating in waters off the Pratas Islands (Dongsha Islands, 東沙群島), the Bashi Channel and south of the Taiwan Strait. A land alert is expected to be announced some time between late last night and early this morning, the CWA said. As of press time last night, Taoyuan, as well as Yilan, Hualien and Penghu counties had declared today a typhoon day, canceling work and classes. Except for a few select districts in Taipei and New Taipei City, all other areas and city
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