Central interventions to high inflation continue: The interest rate wind that surrounds the world

Central interventions to high inflation continue: The interest rate wind that surrounds the world
Central interventions to high inflation continue: The interest rate wind that surrounds the world

The world, including developed countries, is experiencing inflation problems due to disruptions in the international supply chain, the chip and the energy crisis that emerged with the Russia-Ukraine war. Central banks also determine their monetary policies according to their current conditions. Economies that do not want to capsize in the inflation wave are looking to fill their sails with interest. The US Federal Reserve (Fed), which continues to increase interest rates, continues to affect the markets. The European Central Bank (ECB) is also following a policy of increasing interest rates.

FED WILL CONTINUE INCREASING INTEREST INTERESTS

Inflation in America is rising above expectations. In August, inflation increased by 0.1 percent on a monthly basis and rose to 8.3 percent annually. The expectation was 8.1 percent. The Fed, on the other hand, made the first rate hike in March against the rising inflation. It increased interest rates by 25 basis points in March for the first time in 3 years. In May, the Fed increased interest rates by 50 basis points, making it the highest rate hike since 2000. The Fed’s policy continued until September. After the inflation was higher than expected, the Fed made an increase of 75 basis points until the interest rate decision was announced yesterday. Thus, the interest rate rose to 3.25%. The year-end rate expectation was 4.4 percent.

Fed rate hikes strengthen the dollar’s hand. The increase in the Dollar/Euro parity continues. 1 Euro is 0.98 dollars.

A FIRST IN THE HISTORY OF THE EUROPEAN CENTRAL BANK

The European Central Bank (ECB) is also raising interest rates. As part of the fight against inflation, the ECB increased interest rates by 75 basis points in September. This rate hike is the first time since the establishment of the ECB. The ECB rate is currently 1.25% and it is stated that the increase will continue. The ECB started raising interest rates for the first time in 11 years.

CENTRAL BANK OF SWITZERLAND MINUS TO POSITIVE

The Swiss National Bank (SNB) also switched from negative to positive interest rates for the first time since 2014. While the SNB rate was -0.25, the rate was increased by 75 basis points after the meeting held today. In line with the expectations of the markets, the interest rate was increased to 0.50 percent. Prior to the start of rate hikes, the SNB interest rate was at -0.75%. The SNB has maintained this level in its last 25 meetings.

On the other hand, the SNB lowered its inflation expectation from 2.8 percent to 3.0 percent for this year, from 1.9 percent to 2.4 percent for next year, and from 1.6 percent to 1 percent for 2024. Raised it to 7.

HIGHEST INCREASE IN 27 YEARS FROM THE CENTRAL BANK OF ENGLAND

The Bank of England (BoE) increased by 50 basis points in August, the highest increase in 27 years. Thus, the interest rate rose to 1.75. Continuing to increase interest rates, the UK also increased interest rates by 50 basis points in September. Thus, 7 months went to interest rate hike. With the last decision, the BoE increased the interest rate to 2.25%. UK inflation is expected to peak at 13.3 next month.

12 MONTHS CONTINUOUS INCREASE FROM THE CENTRAL BANK OF PERU

The Peruvian Central Bank (PCRB) continued to increase interest rates for 12 months without interruption, which it started last August. PCRB, which started to increase when the interest rates were at the level of 0.25 percent, finally reached the peak of 6 months with an increase of 50 basis points. If 12 was collected, interest rates were increased by 525 basis points. Thus, the PCRB rate increased to 6 percent.

CENTRAL BANK OF CANADA HIGHEST SINCE 2008

The Bank of Canada raised interest rates to the highest level since 2008. The Bank of Canada, which increased 75 basis points in September, thus increased the interest rate to 3.25 percent.

A RECORD LEVEL FROM THE CENTRAL BANK OF ARGENTINA

Turkey is the country with the highest inflation among OECD countries. Argentina is in second place. The interest policy of Argentina, which is struggling with inflation, is completely different from Turkey’s. The Central Bank of Argentina, which wanted to prevent inflation, increased the interest rate by 550 basis points from 69.50 percent to 75 percent. The bank will continue to increase interest rates. Inflation in Argentina was 69.75 percent in August.

The article is in Turkish

Tags: Central interventions high inflation continue interest rate wind surrounds world

NEXT Credit Opportunity from Ziraat Bank to Those with Low Credit Ratings! Loan Delayed by 6 Months