Interest Rate Hikes in Indonesia, the Philippines and Czech Republic but a Cut in Brazil
June 18, 2026
Bank Indonesia’s 25-basis point rate hike to 5.75% followed an unscheduled review just eight days earlier and an initial tightening done in May. The haste implied by this sequence of increases totaling a full percentage point has been motivated by inflation of 3.1% that exceeds the 2.5% target mid-point but even more so by the weak rupiah and depleted forex reserves after significant intervention to counter the currencies depreciation.
At Bangko Sentral ng Pilipinas, the policy rate has been increased by 25 basis points as well today to 4.75%. An initial move in April represented a trend reversal following a series of reductions from a peak of 6.5% maintained between October 2023 and August 2024 to 4.25% reached initially in February of this year. In justifying today’s rate hike, a released statement argues,
Inflationary pressures remain strong. Global oil and fertilizer prices remain elevated and continue to drive domestic fuel and food prices. Rising core inflation indicates broadening price pressures and second-round effects, including higher inflation expectations.
The Czech 2-week repo rate increase to 3.75% today from 3.50% that had prevailed for the past 13 months follows on the heels of a similarly-sized increase at the European Central Bank last week, represents that central bank’s first tightening since mid-2022 and “aims to keep headline inflation stabilized close to the 2% inflation target over the monetary policy horizon,” according to officials in their released statement. One of the Czech National Bank’s seven policymakers favored leaving the rate level at 3.50%.
The Central Bank of Brazil’s Selic interest rate was cut another 25 basis points to 14.25%. That was the third such reduction since April and leaves the level will above inflation, which has accelerated from a low of 3.16% in mid-2023 to 4.72%. A cautious approach to lowering the rate level will continue.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank Indonesia, Central Bank of Brazil, Central Bank of The Philippines, Czech National Bank
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