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In several countries, monetary policy decision makers decided to continue raising their interest rates, following in the footsteps of the Federal Reserve, despite the fact that some analysts bet on a pause, at least until the banking turbulence subsided.
The Central Bank of England, the Swiss National Bank and other of their counterparts replicated the interest rate hike decreed by the Fed, confident that their banking systems are resilient enough and convinced that there is still a way to go in the fight against inflation.
Incessant rate hikes are precisely among the factors blamed for the worst stress in the banking sector since the 2008 financial crisis, and investors have questioned whether central banks should press ahead with their tightening policy in instead of relaxing this measure that seeks to discourage consumption.
Andrew Bailey explains why we have raised rates by 0.25% today. Inflation is still too high, but we continue to expect it to fall sharply from the middle of this year. Raising interest rates is the best way we have of making sure that happens. pic.twitter.com/kwhowGRZoa
— Bank of England (@bankofengland) March 23, 2023
However, in addition to the issuing banks from the United States, Switzerland and England, others such as Norway, the Philippines, Hong Kong and Taiwan did the same on Thursday, March 23, tightening access to credit at a time when inflation is not slowing down. what is wanted
Forced buyout of Credit Suisse by UBS ‘averted financial disaster’: Swiss National Bank
The Swiss National Bank raised its benchmark interest rate by 50 basis points on Thursday, delivering a message that it hopes will reassure the market: UBS’s forced takeover of Credit Suisse averted financial disaster.
“If this solution had not worked, Credit Suisse would have failed, with dire consequences for Switzerland, but also for the global economy,” SNB Chairman Thomas Jordan told a news conference.
With a $3.2 billion buy-sell promise between Switzerland’s first and second banks, authorities offered financial guarantees worth up to 260 billion Swiss francs ($280 billion) to close the deal.
Stabilization has already begun in Latin America
On Wednesday, March 22, the Central Bank of Brazil decided to keep its interest rates at 13.75%, ignoring the criticism made a day before by President Luiz Inácio ‘Lula’ da Silva, who described the current level as “irresponsible ”.
The issuer justified its questioned decision in the inflation that remains high in the country and in the fear that the situation will worsen due to the negative global economic situation.
“Since the previous meeting of the Monetary Policy Committee (of the Central Bank), the external environment has deteriorated. The episodes involving banks in the United States and Europe have raised uncertainty and volatility in the markets and have to be monitored,” the bank alleged. bank in a statement.
With Reuters and AP
