The new trend: Interest rates increase

Beyond Europe and America will increase interest rates in many countries happily, sometimes for months. India and Australia drew their reins on monetary policy this week, two weeks ago China was higher interest rates.

Bank of India Borivli West, Bank of India Mumbai Central, Bank of India Ramdas Nayak Marg

The Chinese central bank began the week before the current monetary policy rate hike round. On 19 October the central bank raised its key interest rate by 0.25 percentage points to 5.56 percent. A justification for this move was the Fed does not, the first interest rate increase is expected for almost two years, but serve the purpose of taking the booming economy in the country to a little wind from the sails.



In comparison to the "old" economies in Europe and America, in fact, before China puts a considerable growth rate. GDP grew by 10.3 percent in the third quarter, the inflation rate was 3.5 percent, well above the target set by the Central Bank of 3.0 percent. Despite the rate hike came as a surprise two weeks ago, and it led to the currency and commodity markets to significant movements became more expensive dollar and pound, euro and key commodities slipped.




For China economists expect further rate hikes in the coming months. With such a high rate of economic growth threatens to overheat the economy. To avoid this, further rate increases are inevitable.



India and Australia

The current base rate increases from this week, even they have in India and Australia, the markets for obvious reasons not affected to the extent that China's rate hike two weeks ago. The global impact of the two economies falls significantly behind that of China.



In Australia, the central bank increased the interest rate to 4.75 percent. Unlike all other central banks of industrialized countries, the Reserve Bank of Australia in October 2009 had already tightened its monetary policy and began to raise interest rates again. There was reason for this: The country had recovered very quickly from the global economic crisis, the annualized GDP is currently considering to order more than three percent, the unemployment rate has stagnated at around five percent.



Now would be the rapidly rising profits of exporters and impending capacity constraints into account, said the central bank with now. The inflation risk is however currently classified as rather low. Before the beginning of 2011, the RBA does not raise interest rates so on.



Even in India, the central bank on Tuesday raised its key rate by 25 basis points to 6.25 percent now. However, the Reserve Bank of India does not want to slow down primarily to a current hot economy, but the curb out of control prices.