This adjustment is the strongest since 1994 and with it, the central bank led by Jerome Powell seeks to contain inflation in the United States, which is at its highest levels in four decades.
England
The Bank of England (BoE) announced last Thursday a fifth consecutive rise in its main interest rate, to 1.25%, a new record since 2009, to fight inflation, which is expected to exceed 11% in the United Kingdom in october.
The British central bank decided to raise its rate by 0.25 percentage points.
Brazil
Brazil’s central bank was not far behind and also decreed last Wednesday a 50 basis point hike in its main monetary policy instrument and announced another increase of the same size or less at its next meeting, which extends its aggressive tightening cycle. monetary.
The bank’s rate-setting committee, known as Copom, raised its benchmark Selic interest rate to 13.25%, the highest level since early 2017 and a sharp rise from a record low of 2% in March 2021.
Argentina
The board of directors of Argentina’s central bank (BCRA) increased its reference rate by 300 basis points, to leave it at 52%, in an attempt to combat the country’s high inflation.
In the midst of a long economic crisis, the third economy in Latin America would have an inflation of between 52% and 62% this year, according to the Government, however experts believe that it could be around 70%.
“This rate increase is more symbolic than effective, since it contains neither inflation nor the dollar because what exists is full mistrust. It is totally harmless for everything that happens to Argentina,” said Mariano Sardáns, executive director of the FDI Wealth Manager.
Hong Kong
Hong Kong authorities announced on June 16 a 75 basis point hike in their benchmark interest rate after the US Federal Reserve made a similar hike to combat inflation.
The rate stood at 2%, according to a statement from the Hong Kong Monetary Authority, the central bank of the former British colony, which belongs to China but has autonomy in areas such as border control or, precisely, monetary policy. .
Hungary
In Budapest, the Hungarian central bank unexpectedly raised the interest rate on one-week deposits by 50 basis points to 7.25%, also to control inflation, which continues to rise persistently and is in double digits.
And Mexico?
Faced with the accelerated increase in the cost of credits, the question arises as to what the Bank of Mexico (Banxico) will do, which will hold its monetary policy meeting on June 23.
Banxico considers that the “disorderly” increase in global interest rates is one of the main challenges for the Mexican financial system, which is why the entity’s governor, Victoria Rodríguez, said last Wednesday that they will review the document issued the Fed before deciding the magnitude of the adjustment to the reference rate.
With information from agencies
