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Philippines raises rates as prices hit one year high | |
(about 21 hours later) | |
The Philippines central bank has raised the cost of borrowing after consumer prices rose to a one year high. | |
The benchmark overnight borrowing rate was increased by 0.25%, bringing it to 4.5% - the highest in two years. | |
Philippines central bank governor, Amando Tetangco, signalled that this could be the start of further policy tightening. | |
Earlier, the consumer price index rose by 4.5% in April from a year earlier, said the National Statistics Office. | |
"The Monetary Board remains prepared to take appropriate actions necessary to ensure the achievement of the BSP's [central bank Bangko Sentral ng Pilipinas] price stability objective," said Mr Tetangco after the rate decision. | |
The Philippines previously raised the cost of borrowing in March this year, becoming the last major Asian country to do so after the global economy emerged from the financial crisis. | |
Central banks in Asia have generally been trying to rein in rising prices without hurting economic growth. | |
Price concerns | |
"Inflation resumed its acceleration in April," said Sherman Chan from HSBC, referring to the 4.5% figure. | |
"This is hardly a surprise, given the strong inflationary pressures coming from food and oil recently." | "This is hardly a surprise, given the strong inflationary pressures coming from food and oil recently." |
These factors have been affecting prices in other Asian countries as well leading to interest rate hikes in recent months. | |
Thailand increased the cost of borrowing this month for the sixth time since July 2010. | |
And India has raised rates nine times in 15 months. | And India has raised rates nine times in 15 months. |