By October 2026, seven of the nine central banks covered here have raised rates this year. Fuel prices jumped after the Middle East conflict disrupted shipping through the Strait of Hormuz, several currencies weakened, and inflation rose. Thailand and Malaysia have not followed. They are still holding at low rates, and the split shows how differently each economy has been hit.

The latest decisions

The latest hike came on 7 October, when the Reserve Bank of India raised its repo rate by 25 basis points to 5.50%. It also changed its stance from neutral to "calibrated tightening". The rate decision was unanimous, but two members preferred to keep a neutral stance. The committee said "recalibrating the policy rate is imperative". The Week described it as the RBI's first hike in nearly four years.

A week earlier, on 29 September, the Reserve Bank of Australia raised its cash rate to 4.60%, saying "inflation remains elevated and some of the upside risks flagged in August are materialising." That was its fourth hike of 2026. The RBA also raised rates in February (to 3.85%), March (to 4.10%) and May (to 4.35%).

On 18 September, the Bank of Japan raised its short-term policy rate to around 1.25% by a 7–2 vote. It had already moved to around 1.0% in June, and The Nation reported that the new level is a 31-year high. The BOJ said the rise in crude oil prices is expected to push up prices, "mainly of energy and goods", and that the recent depreciation of the yen is likely to raise prices, "mainly of durable goods."

Two days earlier, the US Federal Reserve raised its target range to 3.75–4.00% by a 12–0 vote. Central Banking called it the Fed's first hike since 2023.

In August, the Bank of Korea raised its base rate to 3.00%. It was the bank's second hike in a row, after a July move to 2.75%. Also in August, Bangko Sentral ng Pilipinas raised its policy rate to 5.00%, its third quarter-point hike since April. The BSP said in its statement that "these underlying price risks require preemptive monetary action", SunStar reported.

Bank Indonesia kept the BI-Rate at 5.75% on 23 September and said the decision supports its strategy of stabilising the rupiah. BI did its tightening earlier in the year: 50 basis points in May, 25 at an unscheduled meeting on 9 June and 25 more on 18 June.

The ones holding back

The Bank of Thailand kept its policy rate at 1.00% on 26 August, with a unanimous vote. It pointed to growth that remains "low and uneven". The BOT cut to 1.00% in February and has not moved since.

Bank Negara Malaysia kept the overnight policy rate at 2.75% on 3 September. It noted that the economy grew 5.7% in the first half of 2026 and that headline inflation averaged only 1.8% over the first seven months.

Comparison table

Central bank Policy rate Moves in 2026 Latest inflation Next decision
Reserve Bank of India 5.50% +25bp (Oct) 4.8% (Aug) 2–4 Dec
Reserve Bank of Australia 4.60% +100bp (four hikes) 4.0% (Aug); trimmed mean 3.6% 3 Nov
Bank Indonesia 5.75% +100bp (May–Jun), then held 3.28% (Sep) 20–21 Oct
Bangko Sentral ng Pilipinas 5.00% +75bp (Apr, Jun, Aug) 7.2% (Sep) 22 Oct
Bank of Korea 3.00% +50bp (Jul, Aug) 2.9% (Sep) 22 Oct
Bank of Japan ~1.25% Hikes in Jun and Sep 1.7% core (Aug) 29–30 Oct
Bank Negara Malaysia 2.75% No change 1.9% (Aug) 5 Nov
Bank of Thailand 1.00% −25bp (Feb) 2.82% (Sep) 28 Oct
US Federal Reserve 3.75–4.00% +25bp (Sep) 3.4% (Aug) 27–28 Oct

Sources: central bank statements linked above; inflation from RBI, ABS, BPS via Republika, PSA, Korea JoongAng Daily, Trading Economics (Japan, CPI excluding fresh food), DOSM via Malay Mail, TPSO via The Nation and BLS. Meeting dates are from official calendars (RBA, BI, BOJ, Fed), the RBI statement, FocusEconomics (Korea, Thailand), Paul Tan (Malaysia) and The Manila Times (BSP).

For live figures, see our APAC central bank rates tracker.

What drives the divergence

Energy dependence. According to the US Energy Information Administration, 84% of the crude oil and condensate that passed through Hormuz in 2024 went to Asia, and China, India, Japan and South Korea took 69% of the total. The EIA later estimated that crude and liquids flows through the strait fell to 4.9 million barrels a day in the second quarter of 2026, down from 21.6 million in the fourth quarter of 2025 (S&P Global, 11 August). Inflation data across the region shows the effect:

  • In Korea, petroleum product prices were 14.8% higher in September than a year earlier.
  • In the Philippines, transport inflation reached 14.6% in September.
  • In Australia, automotive fuel rose 14.8% in August alone.
  • In Thailand, energy contributed 1.85 percentage points of September's 2.82% inflation.

Currency pressure. Bank Indonesia has explicitly linked its policy to stabilising the rupiah, which stood at Rp17,855 per US dollar on 22 September. The BOJ cited the yen's depreciation as a source of upward pressure on prices and listed exchange-rate developments among its risks. Higher US rates after the Fed's September move can also add to pressure on Asian currencies. Our ASEAN currencies outlook looks at this in more detail.

Growth and domestic demand. Where the economy is strong, central banks have had more room to tighten. Korea's hikes came alongside strong exports and semiconductor investment, as well as rising Seoul housing prices and faster household debt growth. Thailand is the opposite case. Energy accounts for most of headline inflation, according to TPSO data, but the BOT says "overall growth remains low and uneven" and that "SME loans continue to contract." In Malaysia, BNM says inflation "has edged lower in recent months but is expected to remain elevated given the lagged pass-through of energy costs to consumer prices." With first-half growth of 5.7% and inflation below 2%, BNM has kept its rate unchanged.

What to watch

  • 20–21 October, Bank Indonesia: a combined quarterly and annual review, coming soon after September inflation rose to 3.28%.
  • 22 October, Bank of Korea and BSP: Manila's decision comes after inflation rose to 7.2%, matching April's level, which is the highest so far in 2026, The Manila Times reported. The BSP said it remained "vigilant and guided by incoming data."
  • 27–28 October, Federal Reserve: any further US hike could add more pressure on Asian currencies.
  • 28 October, Bank of Thailand: this is the last scheduled meeting before four new MPC members start their terms on 1 November.
  • 29–30 October, Bank of Japan: this meeting also releases a new Outlook Report.
  • 3 November, RBA: the RBA has said it will "continue to do what it considers necessary to bring inflation sustainably back to target."
  • 5 November, BNM: the final meeting of the year.
  • 2–4 December, RBI: the next MPC decision. The RBA (7–8 December), Fed (8–9 December), BI (15–16 December) and BOJ (17–18 December) also meet in December.

Key numbers

  • 7.2%: Philippine inflation in September, the highest of the economies covered here
  • 4.60%: RBA cash rate after four hikes in 2026
  • 5.50%: RBI repo rate after the 7 October hike
  • ~1.25%: BOJ policy rate, a 31-year high
  • 84%: share of 2024 Hormuz crude and condensate flows that went to Asia (EIA)

This is general information, not financial advice.

This article was researched with AI assistance and reviewed by the NDNews editorial team. It is based on official data and media reports as of 8 October 2026. It is not financial advice.