Accelerating Inflation in Asia Puts Pressure on Central Banks to Raise Rates

Accelerating inflation is rippling through the Asia-Pacific, stoking expectations that policy makers will need to keep ratcheting up borrowing costs to cool climbing prices.

Cautioning that inflation was yet to peak, Australia’s central bank on Tuesday raised its interest rate by half a percentage point for the second straight month. The Reserve Bank of Australia increased the official cash rate to 1.35% from 0.85%—adding to June’s 0.50 percentage-point hike and a 0.25 percentage-point increase in May—as Gov. Philip Lowe said higher rates would help create a more sustainable balance between supply and demand.