Home Business Rate hikes by global central banks pick up pace in November

Rate hikes by global central banks pick up pace in November

Global financial markets have been on a roller coaster in recent weeks. (File)


The pace and scale of rate hikes delivered by central banks picked up pace again in November as policymakers around the world grapple with decade-high inflation.

The central banks overseeing six of the 10 most-traded currencies raised rates by 350 basis points (bps) between them last month.

The US Federal Reserve, the Bank of England, the Reserve Bank of Australia, Norway’s Norges Bank, Sweden’s Riksbank and the Reserve Bank of New Zealand raised interest rates in November.

The European Central Bank, Bank of Canada, Swiss National Bank and Bank of Japan did not hold rate-setting meetings in November.

The latest moves bring total rate hikes from G10 central banks in 2022 to 2,400 bps.

“Interest rates will continue to rise,” said Alexandra Dmitrijevic at S&P Global Ratings, expecting 2023.

Global financial markets have been on a roller coaster in recent weeks as investors try to gauge how fast and how far the US Federal Reserve and other major central banks are prepared to raise rates to combat inflationary pressures. While there are fears of a slowdown in global growth. is spreading.

Some nascent signs of inflation slowing in the United States in recent days have brought cheer to markets, with Fed officials scheduled to meet on December 13 and 14.

On Wednesday, Fed Chair Jerome Powell said the US central bank could reduce the pace of its rate hikes “by December”.

Data from emerging market central banks showed a similar pattern. Eight of the 18 central banks made rate hikes totaling 400 bps in November – up from 325 bps in October, but far from the 800-plus bps monthly highs in both June and July.

Indonesia, South Korea, Mexico, Thailand, Malaysia, the Philippines, Israel and South Africa all raised rates in November, showing a wave of policy tightening toward Asia and away from Latin America and emerging Europe, where The cycle is nearing its end.

“With the exception of a few countries, we have passed the most intense phase of the rate hike cycle,” said Nafez Zouk at Aviva Investors.

Outlying Turkey, where President Tayyip Erdogan has been pushing for lower interest rates, cut another 150 bps benchmark to bring rates down to single digits, despite inflation above 80%.

All emerging market central banks in the sample did not hold rate-setting meetings last month.

Emerging market central banks raised interest rates by a total of 7,165 bps year-on-year, more than double the 2,745 bps for the whole of 2021, the calculations showed.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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