Bank Indonesia raised its seven-day reverse repurchase rate by 50 basis points to 5.25%, the highest since September 2019. The fourth consecutive monthly hike was within market expectations.

Although inflation in Indonesia eased slightly in October to 5.71% from 5.95% in September, it was still above Bank Indonesia’s target range of 2% to 4% this year. In September, the government raised subsidised fuel prices due to higher oil prices in the wake of the Ukraine war, hitting many households.

The Philippine central bank, which is also contending with a weak peso, raised its key rate by 75 basis points to 5.0%, the highest since March 2009.

The big hike was expected, after the central bank governor Felipe Medalla earlier this month signalled he was ready to match the US Federal Reserve’s most recent 75-basis-point increase.

“By matching the Fed’s rate hike, the central bank reiterates its strong commitment to its mandate of maintaining price stability by aggressively dealing with inflationary pressures stemming from local and global factors,” the governor told reporters on Nov 3.

Medalla also noted the “need to temper any impact on the country’s exchange rate of the most recent Fed rate hike”.

Philippine inflation accelerated to 7.7% in October, the highest since 2008. That puts the year-to-date average at 5.4%, well above the government’s 2% to 4% target.

The peso, meanwhile, has fallen to record lows in recent months, hitting 59 against the US dollar in October, before slightly stabilising to the 57 to 58 level this month.