Central banks around the world are joining the interest rate hike on the 22nd (local time).
According to the Washington Post (WP), the Czech Central Bank raised its key interest rate by 1.25 percentage points (P). The Czech Republic’s benchmark interest rate has reached 7%, the highest since 1999. The Czech Central Bank has raised interest rates nine times in a row since June last year. On May 5, the increase was 0.75 percentage points.
Czech central bank governor Giri Rusnock said, “Recovering domestic price stability is an absolute priority for the Czech central bank at the moment,” adding, “It is an essential condition for long-term prosperity of the national economy.”
“The Czech Republic’s rate hike is not unexpected,” the WP said. “The Czech central bank considered high consumer prices a major threat and hinted that it would raise interest rates once again.”
Iceland’s central bank also raised its key interest rate by 1 percentage point, reaching a five-year high of 4.75 percent.
Bloomberg said the move was aimed at quelling inflation and overheating the housing market, which reached around 7 percent, far exceeding local bank expectations.
Irish authorities have raised interest rates by a total of 2.75 percentage points six times so far this week to stabilize domestic prices, including real estate issues. Bloomberg predicted that interest rates will be raised to 6% by making several additional increases in the future.
The Mongolian benchmark interest rate also rose 1%P to 10% on the same day, China’s Xinhua news agency said.
“To stabilize the mid-term inflation rate, maintain the relative returns of the local currency, Tugreek, and ensure a reasonable level of internal and external economic balance,” Mongolian central bank governor Viyaran Lekagbasuren said at a press conference.
Mongolia’s annual inflation rate was 15.1 percent last month. In particular, the inflation rate in Ulaanbaatar, the capital city where half of the total population of 3.5 million, reached 16.2%.
Earlier in May, the U.S. and Eurozone Consumer Price Index (CPI) reached their highest levels in 40 years, with 8.6% and 8.1%. According to the British National Statistical Office (ONS) the previous day, the UK also recorded a consumer price increase of 9.1% last month, the highest in 40 years.
