As part of that, the Federal Reserve Bank of America hiked interest rates by half a percent on Wednesday night Indian time. Now the Swiss National Bank has also decided to increase the interest rate by dropping the same amount. It is estimated that the Bank of England will also take steps to increase interest rates. Japan’s currency, the yen, has fallen sharply as the US dollar has strengthened.
Inflation in Switzerland
In August, inflation in Switzerland was recorded at 3.5 percent. Therefore, the Swiss National Bank, which has maintained negative interest rates for many years, had to raise interest rates on a large scale for the first time on Thursday. The Swiss National Bank cut interest rates to 0.5 percent from minus 0.25 percent to control inflation. According to experts, a rich country like Switzerland is less likely to suffer a massive inflation. Recently, the sudden rise in the value of the Swiss Franc has forced many citizens to buy fuel and other consumer goods from neighboring countries.
The struggle to recover the yen
The Central Bank of Japan has taken some steps to revive the currency of Japan, the yen. The Japanese yen fell sharply against the US dollar on Wednesday. One US dollar was equal to 146 yen. This is the first time in 24 years that the yen has lost such a large amount. Earlier in 2011, when the yen weakened against the dollar, the Bank of Japan intervened. On Thursday, the bank kept the benchmark interest rate at minus 0.1 percent.
A rate hike by the Bank of England
The Bank of England raised interest rates by half a percentage point on Thursday to 2.25 percent to keep pace with inflation. This is the biggest increase in interest rates in the last 27 years. The decision to raise interest rates was taken a week late as the country mourned the death of Queen Elizabeth II. Due to this rate hike, loans are going to be much more expensive in England. The prices of fuel and food in the country have increased tremendously. Meanwhile, the country’s currency is also depreciating. As a result, the country is witnessing the highest inflation in the last 40 years.
‘Federal’ interest rate hike
The Federal Reserve on Wednesday raised interest rates for the third time in a row by 0.75 percent. With this decision, the benchmark rate of interest is likely to reach 4.4 percent by the end of this year and 4.06 percent by 2023. The Fed meeting will be held again in November, in which the interest rate is expected to increase again by 0.75 percent.