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South Korean, Australian Borrowers Face Higher Interest Rates


It is now more expensive to borrow money in South Korea and Australia after their central banks raised interest rates. And in corporate news, Japan's unprofitable flag carrier sees some improvement. VOA's Heda Bayron has this week's summary of business news in the Asia-Pacific.

South Korea's central bank has raised its key interest rate 25 basis points to five percent - the highest in more than six years. It was the second rate increase in as many months.

Tighter credit is also being felt in Australia where interest rates are at an 11-year high. The Reserve Bank lifted rates to 6.5 percent.

The two countries' central banks say they raised rates to control inflation.

Australian Prime Minister John Howard, who promised in 2004 to keep rates low, is not happy with the situation.

"Sure we've had an interest rate rise and I'm sorry about that," he said.

In airline news, Hong Kong's Cathay Pacific Airways says profit for the first six months of the year jumped 55 percent from last year despite weaker cargo revenues. The airline says strong passenger demand, particularly for first and business class seats, boosted profit to $330 million.

On the other hand, Japan Airlines remains in the red. The company says it has, however, narrowed its loss by 84 percent to $36 million during the three months ending in June. Japan Airlines says job cuts and the closure of unprofitable routes helped reduce the loss.

In banking, Standard Chartered, the British bank that makes most of its money in Asia, says revenue in China doubled to $300 million in the first half of the year.

Speaking in Hong Kong, Standard Chartered Bank Group Executive Director Kai Nargolwala says the bank plans to increase staff and branches in China this year.

"We are now distinctively placed across greater China, strongly positioned in Hong Kong, Taiwan and China itself, superbly positioned to take advantage of the trade and investment dynamics in this region," he said.

U.S. fast food giant McDonald's says it will increase its wages in China by 12 to 56 percent above China's minimum wage. McDonald's and other Western fast-food companies came under investigation for underpaying workers. McDonald's runs more than 800 restaurants in China.