The Australian central bank has been decisive as they have cut the benchmark interest rate by one percentage point and it has helped Asian stock rebound and lead the way for other countries to act in the same manner.

A statement form the central bank indicated the cut was a direct response to the reduction in growth of Australia’s trading partners in the region as well as combating inflation.

Inflation is around 5 percent that is well above the 2-3 percent ceiling rate and this was also triggered in part by the increased fear of a similar house market failure as experienced in the US.

The government agreed with the decision by the bank, as it directly benefit Australian families in face of the Credit Crunch.

The Bank Indonesia however has increased its policy rate by 25 basis points to 9.5% in order to fight off inflation, the move represents the sixth straight month the central bank has increased the key interest rate.

The Rupiah fell 0.2 percent to 9,595 against the dollar in Jakarta, whilst inflation is made worse by imports as the cost of importing fuel, soybean and wheat increased by whopping 12.1 percent last year.