1 / 11Major central banks across the globe are racing to hike interest rates and ditch post-pandemic stimulus in a bid to tame inflation. A number of banks have raised interest rates since US Federal Reserve Chairman Jerome Powell announced a monetary policy normalisation earlier this year. In January, Powell had said that the US economy was in need of tighter monetary policy and that he expected the central bank would indulge in a series of interest rate hikes this year while reducing extraordinary help that the Fed had provided during the pandemic era. "If things develop as expected, we'll be normalising policy, meaning we're going to end our asset purchases in March, meaning we'll be raising rates over the course of the year," CNBC had quoted him as saying in January this year. Let's take a look at how other central banks have taken cue from Powell's message and implemented rate hikes over the past few months.
2 / 11Norway | Norges Bank of Norway kick-started the rate-hiking cycle in September 2021. Since then, the central bank has raised rates three times. It is likely to raise its 0.75 percent rate again on June 23. Norges Bank intends to hike rates seven more times by end-2023. (Image: Shutterstock)
3 / 11New Zealand | On May 25, the Reserve Bank of New Zealand raised the official cash rate by 50 basis points to 2 percent. The central bank aims to raise rates to 4 percent over the coming year and remain there until 2024. (Image: Reuters)
4 / 11England | Since December, the Bank of England has raised rates four times, including a quarter-point move last month. At present, the key rate of 1 percent is at the highest since 2009. The central bank is likely to raise rates for the fifth consecutive time in its monetary policy meeting on Thursday. (Image: Shutterstock)
5 / 11United States | On Wednesday, the Us Federal Reserve hiked interest rates by 75 basis points or 0.75 percentage points, which is the biggest hike since 1994. Powell says the central bank could hike rates by another 0.5 or 0.75 percentage points in July. (Image: Reuters)
6 / 11Japan | The Bank of Japan (BoJ) has kept interest rates low despite a relentless fall in yen that has pushed up import costs. In April, Japan's core consumer prices rose 2.1 percent from a year earlier, which is higher than the central bank’s 2 percent target. However, BoJ officials believe that the cost-push inflation is temporary and will not require a tighter monetary policy. (Image: AP Photo)
7 / 11Australia | The Reserve Bank of Australia hiked interest rates by 50 basis points on June 6 amid a 20-year high inflation of 5.1 percent. This was the central bank’s second straight move this year. It has hiked rates by a quarter point in May, which was also the first increase since 2010. The market expects another 50 basis points hike in July that will take the current 0.85 percent rate to 1.5 percent by August. (Image: Reuters)
8 / 11Euro zone | The European Central Bank (ECB) is likely to raise interest rates in July for the first time in 11 years, which will be followed by another hike in September. Inflation had become a “major challenge”, the bank’s 25-member monetary policy council, which met earlier this month in Amsterdam, said. (Image: Reuters)
9 / 11India | The Reserve Bank of India announced its first rate hike in four years in May. The RBI increased its benchmark repo rate by 40 basis points to 4.40 percent. At the same time, the central bank hiked the Cash Reserve Ratio by 50 basis points to 4.5 percent. The RBI may hike rates again in the near term. (Image: Reuters)
10 / 11Brazil | Banco Central Do Brasil, Brazil’s central bank, hiked key interest rates in May for the 10th consecutive time to 12.75 percent. Brazil’s central bank has tightened monetary policy by nearly 10 percent since 2021. As economic growth risks surge, Banco Central Do Brasil may adopt a slower pace of rate hikes in the future. (Image: Reuters)
11 / 11China | The People’s Bank of China did not cut a key policy interest rate on June 15 in a bid to avoid further policy divergence from the US which could add pressure to the domestic currency yuan. The Chinese central bank retained the rate on its one-year medium-term lending facility at 2.85 percent. In May, China's central bank had announced a rate cut on the five-year loan prime rate to 4.45 percent from the previous 4.6 percent. (Image: Reuters)
