In response to high inflation, many central banks have raised interest rates frequently this year。Last week, a number of central banks announced further interest rate hikes in an effort to achieve a sustainable balance between supply and demand in the economy。
On October 3, the Bank of Israel announced that it would raise its benchmark interest rate by 0.75 percentage points to 2.75 per cent to curb rising inflation。This is the fifth time this year that the Bank of Israel has raised its benchmark interest rate to its highest level since December 2011。The Bank of Israel said in a statement that the inflation rate in the country over the past 12 months was 4.6%。In July, Israel's annual inflation rate rose to 5. 5 percent.2 percent, the highest since October 2008。Although the Bank of Israel has raised interest rates five times since April this year, the value of the new shekel has fallen significantly。According to data released by the Bank of Israel on the 3rd, the exchange rate of the new shekel to the dollar was 3.583 to 1, the lowest in more than two years。
Australia has also been raising interest rates in response to high inflation。On October 4th the Reserve Bank of Australia (the central bank) announced that it would raise its benchmark interest rate by 25 basis points to 2.6%, while raising the interest rate on foreign exchange settlement balances by 25 basis points to 2.5%。This is the sixth time the Reserve Bank of Australia has raised interest rates this year。Rba Governor Philip Lowe said continuing to raise interest rates would help the economy achieve a "more sustainable balance between supply and demand", which was also necessary to reduce inflation。Lowe said he expects inflation to rise further in the coming months and slow next year as global supply-side issues are resolved。The Reserve Bank of Australia expects Australia's consumer price index (CPI) to rise about 7 percent this year.75%, slightly more than 4% in 2023 and about 3% in 2024。
On October 5, New Zealand's central bank announced that it would raise its benchmark interest rate by 50 basis points to 3.5% to curb high inflation。This is the bank's eighth consecutive rate increase since October 2021 and the fifth consecutive 50 basis point increase since April this year。The central bank of New Zealand believes that the Federal Reserve's continued interest rate hike and international market risks have caused continued depreciation pressure on the New Zealand dollar。If the New Zealand dollar remains weak, it will continue to put upward pressure on inflation。The report released by the central bank of New Zealand said that under the influence of international factors such as the Ukraine crisis, New Zealand's domestic food and energy prices are high, core consumer price inflation is still too high, and the labor market is still short, which restricts New Zealand's production capacity。
For the current situation of the global economy, the International Monetary Fund (IMF) Managing Director Georgieva said on October 6 that the world economy has suffered multiple shocks and is undergoing a fundamental transformation。In response to the current situation, she called on relevant countries to curb inflation and jointly support emerging market and developing economies。Ms Georgieva called on policymakers to focus on three priorities: resolutely curbing inflation, developing responsible fiscal policies and working together to support emerging market and developing economies。She also recommended that countries implement reforms and work together to address food security and climate change to address the underlying factors of global vulnerability。
(Article from International Business Daily)