Oil-poor south-east Asian countries are stepping up efforts to counter the deepening economic impact of the war in the Middle East as an energy crisis drives up inflation, undermines currencies and threatens livelihoods.
Policymakers across the region, which is heavily reliant on oil supplies that have been choked off by the US-Israeli war on Iran, stepped up efforts this week to respond to the conflict beyond subsidising fuel costs and trying to reduce demand.
Indonesia, south-east Asia’s largest economy, raised its main policy interest rate by a hefty 50 basis points to 5.25 per cent — its first increase in two years — even as consumer price inflation has fallen sharply in the past few months. The central bank said the rise was needed to shore up the rupiah and as a “pre-emptive measure” to keep price rises under control.