Madrid (EFE).- At a time when the different central banks of the world are debating between maintaining or raising interest rates, China is the only country that has lowered them in June, while the United States has chosen to maintain them and the The European Central Bank has raised them again to contain still high inflation.
The rates in the US have not changed this month, they remain in a range between 5% and 5.25% after a streak of ten consecutive increases, a decision that was announced a day after learning that the interannual rate Inflation fell considerably in May, nine tenths, to stand at 4%.
Federal Reserve (Fed) Chairman Jerome Powell has said interest rates are likely to rise again based on economic data in the coming weeks, although the Fed acknowledges that tighter credit conditions are likely weigh on economic activity and hiring.
The Fed’s next meeting will take place on July 25 and 26, and before the end of the year, committee members will hold three more meetings in September, October, and December.
The ECB plans to raise rates again in July
For its part, the European Central Bank (ECB) has raised rates again by 0.25 points, to 4%, and its president, Christine Lagarde, has sent a strong message by assuring that they will rise again in July, unless circumstances change.
In his opinion, the journey has not ended and the destination has not yet been reached, so there is still “ground to cover” to achieve the objective of reducing inflation to 2% from the current 6.1% in the euro area.
This strategy of raising rates has been adopted by other countries such as Australia, Canada, Turkey or the United Kingdom. In the latter case, the Bank of England raised them by half a point this Thursday to 5%, in order to control year-on-year inflation, which last May stood at 8.7%.
The British Economy Minister, Jeremy Hunt, has indicated that the Government has an “indisputable determination” to lower inflation, “since it is the only way in the long term to relieve the pressure on families with mortgages”, and has assured that if measures are not adopted now “later it will be worse”.
China, on the contrary, lowers them
Faced with these decisions, China is the only country whose central bank has announced this week a reduction in its reference interest rates to try to stimulate the national economy, and it does so due to the signs of slowdown that have been seen in its process. recovery after the pandemic.
The People’s Bank of China (BPC) has lowered the reference rate for one-year loans by ten basis points, from 3.65% to 3.55%, the last variation of which dated from last August, when the institution cut it from 3.7%.
The cut will translate into lower borrowing costs and this will provide modest support for economic activity, although it is unlikely to spur a sharp acceleration in credit growth, experts say.
In line with the Fed
No other country has adopted this path of lowering rates, although some have decided to keep them in line with the US Federal Reserve (Fed), such as Brazil, Egypt, Mexico, Russia or Morocco.
The Bank of Mexico (Banxico), for example, maintained this Thursday without changes, for the second consecutive time, the interest rate at 11.25%, the highest level in its history, in a decision that reflects the end of its term. bullish given the slowdown in inflation, which fell in the first half of June to 5.18%, its lowest level since 2021.
Despite the improvement in forecasts and indicators, the central bank still “estimates that the inflationary outlook will be complicated and uncertain throughout the entire forecast horizon, with upward risks.”
Another issue that experts have insisted on in recent months is that monetary policy acts with a delay and its effects may take up to 18 months to be noticed, an issue that central banks should take into account when making their next decisions. on interest rates.