Major central banks mostly raise interest rates over last year

NEW YORK

Ten major central banks, including those of the US, EU, Canada, and Australia, raised interest rates in most of their meetings last year as inflation saw record levels.

Persistent and high, the speed by which prices increased since July 2022 prompted central banks to hike interest rates one after the other in 66 of their total 77 monetary policy meetings.

The banks are now signaling that tightening steps will continue until the inflation targets are reached.

Türkiye's Central Bank also decided to raise its policy rate by 650 basis points to 15% last month, signaling that it would continue tightening its monetary policy until inflation fell to a certain level.

US

The US Federal Reserve (Fed) continued its tighten steps, which began last March, this year.

The Fed has increased the interest rate for seven times in its eight monetary policy meetings since July 2022, while keeping it constant last month.

On the other hand, the Chairman Jerome Powell suggested that additional rate hikes could be on the way this year in an effort to bring inflation down to 2%.

EU

The European Central Bank (ECB) raised rates eight times and pointed to tighter policies in the future against the stubborn inflation, which was at 6.1% in May.

At its last meeting in June, the ECB raised rates 25 basis points.

UK

The Bank of England (BoE) increased its policy rate 50 basis points last month, continuing its tightening steps, which began in December 2021.

The bank raised rates in all eight of its meetings over the past year.

The BoE said further monetary policy tightening would be needed if inflationary pressures remain persistent.

Canada

Canada's central bank decided to hike its interest rate 25 basis points in its June meeting to a 22-year high of 4.75%.

It hiked the rate in six of eight monetary policy meetings over the last one year.

Switzerland

The Swiss National Bank (SNB) increased its interest rate by 75 basis point in September 2022, ending eight years of negative rates.

Last month, it boosted the rate 25 basis points again to 1.75%, thus raising it during all four meetings in a one-year period.

Norway

Norway's central bank increased its interest rate seven times and kept it constant once over the past year.

The interest rate, which was at 1.25% in July 2022, is currently 3.75%.

India

India's central bank raised its rate in four of six meetings, while deciding to keep it constant at the current 6.5% in its last two meetings.

Australia

The Reserve Bank of Australia raised its rate by 25 basis points to 4.1% in June and kept it steady in July.

The bank conducted 12 meetings during the last one year, during which it raised the rate 10 times.

New Zealand

The Reserve Bank of New Zealand hiked its interest rate seven times in the past year.

In May, the bank increased the rate by 25 basis points to 5.5% and signaled that this would be the end of hikes for now.

South Korea

The central bank of South Korea raised the interest rate five times in eight meetings.

The last time it boosted the rate was in January 2023, when it increased it 25 basis points to 3.5%. It kept the rate constant in February, April, and May meetings.

China and Japan

The central banks of China and Japan diverged from their major counterparts.

While the People's Bank of China cut its policy rate twice in the last year, Japan continues to maintain its ultra-loose monetary policy with its interest rate minus 0.1%.

*Writing by Gokhan Ergocun from Istanbul