Central Banks Split Three Ways as Energy-Driven Inflation Lingers

Three central banks in Asia and Europe announced rate decisions on Thursday, and they went three different ways, a sign of how unevenly high energy prices are hitting economies.

Philippines: a bigger hike than expected

The Bangko Sentral ng Pilipinas raised its key rate by 50 basis points to 5.50%, its fourth increase in a row, Reuters reported. All 27 economists in a Reuters poll had expected a smaller, quarter-point move. Inflation in the Philippines jumped to 7.2% in September from 6.1% in August, driven by rice, electricity, fuel and transport costs. The peso firmed to 63.311 per U.S. dollar after the announcement, according to Reuters.

South Korea: a pause after two hikes

The Bank of Korea left its base rate at 3.00% in a unanimous vote. Its statement cited strong export-led growth and inflation near 3%, but said the Middle East conflict and policy in major economies had made the outlook more uncertain. The board said it will decide "the timing and pace of further increases in the Base Rate" based on inflation, growth and financial stability.

Turkey: another small cut

Turkey's central bank cut its one-week repo rate to 36% from 37%, saying the underlying trend of inflation is slowing. It warned that elevated energy prices tied to geopolitical tensions remain an upside risk and that policy "will be tightened" if the inflation outlook worsens significantly and persistently.

Why it matters for crypto

Oil-driven inflation is the common thread, and it is the same pressure facing the Federal Reserve, which meets Oct. 27-28 with another hike still on the table, Decrypt reported. Traders in bitcoin and other risk assets will be watching whether the Fed leans toward the hawkish end of this range.