Inflation fears have prompted central banks in South Korea, Indonesia and New Zealand to raise interest rates. But higher rates have curbed retail sales in Hong Kong.
New Zealand now has the highest interest rates among industrialized countries after the Reserve Bank raised them for the ninth time in a year. Rates rose a quarter of a percentage point to 7.25 percent.
Reserve Bank of New Zealand Chief Alan Bollard says the monetary authority hopes that increasing the cost of borrowing will discourage consumer spending and curb rising prices.
"Household spending and the very buoyant housing market and increased government expenditures and the continued high levels of business investment are all contributing to a strong level of demand in the economy," he said. "And consequently we are still concerned about the tightness of resources and persistence of inflationary pressures."
The government wants to keep inflation to less than three percent.
The Bank of Korea took similar preemptive action against inflation by raising rates by a quarter percentage point to 3.75 percent, the second rise in three months. The bank expects consumer prices to increase three percent next year as consumer spending picks up.
Indonesia has raised key rates by half a percentage point to 12.75 percent, also on inflation fears.
In Hong Kong, higher interest rates have kept some shoppers away from stores, with retail sales growth slowing in October. Prime lending rates in Hong Kong have risen to as much as 7.75 percent. But authorities say retail figures are expected to bounce back during the holiday season.
In airline news, Philippine Airlines says it will be upgrading its fleet with up to 18 new Airbus A320 aircraft to replace its existing Boeing short-range planes. The upgrade will cost $840 million.
China's banking sector continues to be a magnet for foreign investors. The Australia and New Zealand Banking Group, or ANZ, has agreed to buy a 20 percent stake in Tianjin City Commercial Bank, which has assets of eight billion dollars. The deal, worth $120 million, is ANZ's first direct investment in the Chinese banking industry.
