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Indonesia surprises by hiking interest rates to seven-year high

Indonesia's central bank hiked interest rates Wednesday to their highest for seven years, an unexpected move to boost the rupiah, which continues to weaken against the dollar despite several interventions in currency markets.Economists had predicted Bank Indonesia to hold the seven-day reverse repurchase rate at six percent but it instead raised it 25 basis points to 6.25 percent, a level not seen since 2016.Its two other main rates were also raised by 25 basis points."The interest rate increase is to strengthen the rupiah's exchange rate stability against the possibility of worsening global risks," Bank Indonesia governor Perry Warjiyo told a news conference Wednesday.Since exiting the Covid-19 pandemic, Bank Indonesia has joined other global central banks in tightening monetary policy to fight soaring inflation.The surge in prices has been driven in part by Russia's invasion of Ukraine, which stoked worldwide energy and food price rises, as well as supply chain snarls and pandemic-related economic issues.Perry said the move was a "pre-emptive and forward-looking step" to ensure inflation remains within the bank's 1.5-3.5 percent target range. It is currently at 3.05 percent.The rupiah has outperformed regional peers against a strengthening US dollar, but it has still weakened more than five percent since the start of the year, Perry said, even after a string of interventions to support the unit.The greenback has been boosted by fading expectations about how many times the Federal Reserve will cut borrowing costs this year as US inflation remains stubbornly above its target.Economists said if the rupiah continued to slide, Bank Indonesia would likely tighten further."The central bank has been intervening in foreign exchange markets to support the currency, and we thought it would continue with this strategy rather than resume its tightening cycle," said Gareth Leather, senior Asia economist from Capital Economics."In the event of further weakness in the rupiah, then more hikes are likely."

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EU urges probe into reported mass graves at Gaza hospitals

BRUSSELS: The European Union on Wednesday backed a United Nations demand for an independent probe into the reported discovery of mass graves at two Gaza hospitals destroyed in Israeli sieges."This is something that forces us to call for an independent investigation of all the suspicions and all the circumstances, because indeed it creates the impression that there might have been violations of international human rights committed," EU spokesman Peter Stano said."That's why it's important to have independent investigation and to ensure accountability."The UN rights office said Tuesday international investigators should be involved in a probe into the discovery of the bodies.The UN rights office said it was "horrified" by the destruction of Gaza's two biggest hospitals, Al-Shifa in Gaza City and the Nasser Medical Complex in Khan Yunis.Gaza's Civil Defence agency said Tuesday that health workers uncovered nearly 340 bodies of people allegedly killed and buried by Israeli forces at the Nasser complex.Israel's army called claims that its troops had buried bodies during its operation at Nasser "baseless and unfounded".The army has said around 200 militants were killed, and weapons stockpiles recovered, during its operation at Al-Shifa.Around 30 bodies were reported found buried in two graves in the Al-Shifa courtyard.Hospitals, which have protection under international law, have repeatedly come under Israeli bombardment over more than six months of war in Gaza.Israel has accused Palestinian militant group Hamas of using medical facilities to hold hostages abducted during its attack inside Israel on October 7 which set off the war. Hamas has denied the claims.The October 7 attack resulted in the deaths of around 1,170 people in Israel, according to an AFP tally of Israeli official figures.In retaliation, Israel launched a military offensive that has killed at least 34,183 people in Gaza, mostly women and children, according to the territory's health ministry.

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