Fighting Inflation: Six Central Banks Already Raised Interest Rates

Economics & Macro

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Viva Budy Kusnandar 18/07/2022 17:30 WIB

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By June 2022, at least six central banks had raised their benchmark interest rates to curb inflationary pressures.

Central Bank Raises Interest Rates Due to Inflation (June 2022*)

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Fighting Inflation: Six Central Banks Already Raised Interest Rates

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Central Bank Raises Interest Rates Due to Inflation (June 2022*)

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Rising global prices of energy and food commodities have triggered high inflation in various countries. A number of central banks have consequently raised their benchmark interest rates to curb inflation.

The United States is an example of a country experiencing this condition. US annual inflation reached 9.1% (year on year/yoy) in June 2022, the highest in 41 years.

This high inflation led the US Federal Reserve (The Fed) to aggressively raise its benchmark interest rate by 75 basis points (bps) to a range of 1.5%-1.75% in June 2022. Cumulatively, The Fed has raised its interest rate by 150 bps in the first half of 2022.

Singapore's central bank (MAS) also cumulatively raised its benchmark interest rate by 146 bps to 1.56%, after inflation in the country reached 5.6% (yoy) in May 2022.

The Philippine central bank has cumulatively raised its benchmark interest rate by 125 bps to 3.25%, due to inflation soaring to 6.1% (yoy).

Similarly, the central banks of South Korea, Malaysia, and Taiwan have raised their benchmark interest rates to combat inflation, with details as shown in the graph.

Meanwhile, Bank Indonesia (BI) has maintained its benchmark interest rate, BI7DRR, at 3.5%, even though inflation reached 4.35% (yoy) in June 2022. This step was taken to encourage the recovery of the domestic economy from the impact of the Covid-19 pandemic.

(See also: Global Food Prices Down 2.3% in June 2022)

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."