Economy

Economy
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Inflation and Economy: In order to control the skyrocketing inflation, central banks around the world have taken an aggressive approach in the form of increasing policy rates. However, there is an increased risk of the global economy falling into the quagmire of recession.

Jerome Powell, chairman of the US Federal Reserve Bank, says that no one knows whether a rise in interest rates will lead to a recession. If so, how important it will be is not known. Powell said an easing lending policy is unlikely as the Fed is facing its worst inflation rate in four decades.

He said that we have to leave inflation behind. On the other hand, analysts said that this will probably be the last US growth rate because if you also look at the previous policy, then the estimate for the first quarter is less than 6 per cent and after that things have improved, especially on the inflation front.

On Wednesday, the US Federal raised interest rates by 0.75 percent. After this, many countries raised interest rates on Thursday. All countries are continuing the plan to increase interest rates to control inflation on one hand.

  • In the US, interest rates can go up to 4.4 percent this year. This is one per cent higher than the June estimate. It can go up to 4.6% in 2023.
  • The European Central Bank has hiked rates for 19 countries by three quarters, the highest ever.

RBI can also increase by 0.50%
RBI has also raised 1.40% rates in three times since May to contain inflation. Its Monetary Policy Committee meeting will be held from September 28 to 30. It is estimated that the repo rate may increase by 0.35 to 0.50%. With this, all types of loans will become expensive. If this happens then there will be an impact on shopping during the festive season. Its inflation target is below 6%, but it has consistently remained above this target.

These countries increased

Country Growth (in %)
America 0.75
Taiwan 12.5
Hong Kong 0.75
Philippine 0.50
swiss bank 0.25
England 0.50
Vietnam 1.00
Norway 0.50

sharp fall in currencies

  • Indonesia’s rupee rupiah fell 0.1% on an aggressive trend.
  • The Philippine currency fell 0.5%.
  • British pound weakest against dollar in 37 years It lost 1.75%, its weakest since May.
  • The Japanese yen reached its 1986 close.
  • The Australian and New Zealand dollars have hit their lowest level since mid-2020 against the Japanese yen.
  • China’s yuan has hit a 27-month low since June 18, 2020. The euro also declined 1.1 per cent.

Expansion

Inflation and Economy: In order to control the skyrocketing inflation, central banks around the world have taken an aggressive approach in the form of increasing policy rates. However, there is an increased risk of the global economy falling into the quagmire of recession.

Jerome Powell, chairman of the US Federal Reserve Bank, says that no one knows whether a rise in interest rates will lead to a recession. If so, how important it will be is not known. Powell said an easing lending policy is unlikely as the Fed is facing its worst inflation rate in four decades.

He said that we have to leave inflation behind. On the other hand, analysts said that this will probably be the last US growth rate because if you also look at the previous policy, then the estimate for the first quarter is less than 6 per cent and after that things have improved, especially on the inflation front.

On Wednesday, the US Federal raised interest rates by 0.75 percent. After this, many countries raised interest rates on Thursday. All countries are continuing the plan to increase interest rates to control inflation on one hand.

  • In the US, interest rates can go up to 4.4 percent this year. This is one per cent higher than the June estimate. It can go up to 4.6% in 2023.
  • The European Central Bank has hiked rates for 19 countries by three quarters, the highest ever.

RBI can also increase by 0.50%

RBI has also raised 1.40% rates in three times since May to contain inflation. Its Monetary Policy Committee meeting will be held from September 28 to 30. It is estimated that the repo rate may increase by 0.35 to 0.50%. With this, all types of loans will become expensive. If this happens then there will be an impact on shopping during the festive season. Its inflation target is below 6%, but it has consistently remained above this target.

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