RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
BOJ Rate Hike Expectations Grow as Board Member Signals Hawkish Stance 
Fed’s Goolsbee Warns Inflation Remains Elevated, Signals Caution on Rate Cuts 
Senegal Appoints Economist Ahmadou Al Aminou Lo as Prime Minister Amid IMF Debt Crisis 
ECB Signals Possible Rate Hike as Iran Conflict Fuels Inflation Concerns 
RBA Raises Interest Rates to 4.35% Amid Rising Inflation Risks and Middle East Tensions 
US-Iran Framework Deal Raises Hopes for Strait of Hormuz Reopening 
U.S.-Iran Talks Advance as Trump Signals Tough Stance on Hormuz and Nuclear Deal 
Japan Falls to Third-Largest Global Creditor as China Overtakes in 2025 
Wall Street Faces Inflation Pressure as Strong Earnings Season Nears End 
ASX Shares Plunge as Rising Tech Upgrade Costs Shake Investor Confidence 
Dollar Weakens as Iran Peace Hopes Lift EUR/USD and Risk Sentiment 
Eurozone Recession Risks Rise as Middle East Conflict Threatens Growth, ECB Official Warns 
Sri Lanka’s central bank unexpectedly raised its benchmark interest rate by 100 basis points on Tuesday, increasing the overnight policy rate to 8.75% from 7.75% as the country battles rising inflation, a weakening currency, and mounting energy-related economic pressures.
The Central Bank of Sri Lanka (CBSL) said the aggressive rate hike was necessary to contain inflationary risks and stabilize the Sri Lankan rupee, which has faced heavy pressure in recent months. The move exceeded market expectations, as most analysts had predicted a smaller increase of around 25 basis points.
According to the CBSL, higher global energy prices linked to the ongoing U.S.-Israel conflict involving Iran have significantly affected the island nation’s economy. Sri Lanka depends entirely on imported fuel, making it especially vulnerable to global oil market disruptions and supply shocks.
In response to the energy crisis, the government recently increased fuel prices by 40%, introduced fuel rationing, and announced public holidays on Wednesdays to reduce energy consumption. These measures have added to the financial burden on households and businesses already struggling with high living costs.
Sri Lanka’s inflation rate accelerated sharply to 5.4% last month, compared with 2.2% in March, surpassing the central bank’s target level. Officials stated that inflation is likely to remain above 5% in the near term before gradually stabilizing.
Meanwhile, the Sri Lankan rupee has weakened nearly 9% since early March due to foreign exchange pressures and declining investor confidence. Although the CBSL noted that market conditions have recently shown slight improvement, concerns over shrinking foreign reserves remain.
Sri Lanka continues to recover from its devastating 2022 financial crisis caused by a severe dollar shortage. The country is currently operating under a $2.9 billion International Monetary Fund bailout programme aimed at restoring economic stability and rebuilding investor confidence.
