June 30, 2023 (MLN): In an effort to curb rising inflation rates, central banks around the world have been aggressively increasing interest rates, and have made it very clear that Inflation is still a problem.
Worldwide Interest Rates
Pakistan
SBP increased policy rate by 100 bps to 22%.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) decided to raise the policy rate by 100 bps to 22% in an emergent meeting, after deciding to keep the rates unchanged earlier.
United States:
The U.S. Federal Reserve opted to keep its interest rate at 5-5.25% but showed that two more rate hikes are anticipated later in the year.
This decision reflects the Federal Reserve's commitment to address inflationary pressures.
Europe:
Driven by the need to counter persistently high inflation, the ECB increased its benchmark refinancing interest rate by 25 basis points to 3.75%-4%.
United Kingdom (UK):
Marking the 13th consecutive rate hike since December 2021, the Bank of England raised its key interest rate by 50 basis points to 5%.
It is important to note that this increase was larger than anticipated.
Switzerland:
The Swiss National Bank increased its policy interest rate by 25 basis points to 1.75%.
It shows Switzerland's continued efforts to dampen inflationary pressures in the economy.
Turkiye:
The Central Bank of the Republic of Turkiye executed a significant interest rate hike of 650 basis points, raising it to 15%.
This move signifies a shift towards more conventional economic policies to cool down sky-high inflation.
Norway:
Norway's central bank raised its key policy rate by 50 basis points to 3.75%, reaching a 15-year high to control inflationary pressures.
The bank has also indicated its intention to pursue another rate hike in August. In addition, the central bank projects a further increase to 4.25% during the autumn.
