The Reserve Bank of Australia raises interest rates for the fourth time

The Reserve Bank of Australia raises interest rates for the fourth time in a row to 2.35% to tackle inflation.



The Reserve Bank of Australia raises interest rates

The Bank of Canada has the highest interest rate among advanced economies

Bank JP Morgan believes that OPEC + needs to reduce oil production further.









The Reserve Bank of Australia raises interest rates

As part of its efforts to curb inflation, the Bank of Australia decided
on Tuesday to raise interest rates to half a percentage point,
and this is the fourth time in a row,
bringing Australian interest rates to their highest level since 2015 to 2.35% from 1.85,
and this decision was highly expected by economists,
indicating the tightening policy it seeks at a faster pace



Summary of Reserve Bank of Australia Governor Philip Lowe’s remarks during the meeting on two points:


– “The Board expects interest rates to increase significantly
in the coming months but is not on a predetermined path,
it is obliged to take what is necessary to ensure inflation returns to the target rate over time.”


– He also pointed to the Bank of Australia’s reliance on very low unemployment rates
and strong consumption in order to keep the economy moving during the tightening cycle.


Positive indicators

Despite the economic situation and high prices,
families have shown great ability to cope with them in light of the high cost of living,
in addition to the decline in unemployment,
which is currently at its lowest level in 48 years at 3.4%,
which reflects the strength of the labor market,
while Australia announced the achievement of GDP and expectations
indicate an increase of about 0.9% from the previous quarter and 3.4%.
Attention is being taken to Bank of Australia Governor Louie in his meeting on Thursday
to talk about “inflation and the monetary policy framework.”.



The current situation indicates further emphasis

Economists warned about the Reserve Bank of Australia’s tightening policy,
which will last for the next three months, due to the worsening status quo,
while noting expectations of weak consumption by the end of this year.

In addition to the global level, which is still suffering due to many geopolitical tensions.
At the same time, Lowe admitted that policymakers
are working in a tightening direction to try to slow demand
and inflation while avoiding pushing the economy in the opposite direction.
It is also worth mentioning that the deterioration of the real estate sector is a major risk,
as the data showed that real estate credit growth slowed
in July as house prices fell at the fastest pace since 1983.









The Bank of Canada has the highest interest rate among advanced economies


after raising interest rates by 75 basis points to 3.25%.

As part of the Bank of Canada’s attempts to calm the country’s economic situation
and try to reduce inflation after reaching its highest levels in four decades,
the Bank of Canada decided to raise interest rates by about 75 basis points
on Wednesday to get the interest rate to 3.25%,
making the Central Bank of Canada the highest among the major
advanced economies in terms of the highest interest rate Policymakers


The desire for further leverage with increments assessed

Although the Bank of Canada wants to raise interest rates further in the coming period due to high inflation,
it has not shown any urgency regarding interest increases.
It is seeking to increase in the future but at a smaller pace of interest rates,
pending the ideal timing for policymakers to decide on the completion of the tightening campaign.

With monetary policy strongly affecting the economy,
the Bank of Canada will seek to assess the rate hike required so that inflation can return to target.


Interest rate hike for the fourth time in one year

The Bank of Canada’s interest rate hike by 75 basis points to 3.25% is not the first time it has risen at this pace,
as interest rates were raised in July of this year by 100 basis points
after it rose by only half a percentage point in April and June,
and this shows the extent of tightening and efforts in this regard.


Inflation in Canada was at a 40-year high before receding

After the inflation rate in Canada peaked 40 years ago at 8.1% in June,
but quickly fell below 7.6% in July, which was the reason behind
the efforts made by the Governor of the Central Bank to confront inflation,
which, despite its decline to peak, is still at very high levels,
and the target of reaching prices to their target of 2%.

The statement of the Bank of Canada was limited only to the interest rate decision
without announcing any new expectations in the future,
waiting for First Deputy Governor Carolyn Rogers to hold a conference on Thursday
and give more clarity on the bank’s upcoming directions.










Bank JP Morgan believes that OPEC + needs to reduce oil production further.


In order to achieve stability, investment bank JPMorgan believes that OPEC + needs to reduce
its oil production by about one million barrels per day and that this intervention is necessary
to stop the downward momentum in prices and reorganize physical and paper markets.


The decision to cut production was the first by OPEC oil exporters by about 101,000 barrels per day in October,

thus removing any expectations of an increase in September.
This step came within the framework of the OPEC alliance’s quest to restore stability
in the global oil market after geopolitical tensions in the world caused prices to fall.
The minister added after the decision “OPEC +” the seriousness and readiness.


Oil prices in trading on Thursday rose about 1% and are the first time after an eight-month decline,
due to global demand, China’s “zero-covid” policy to fight Covid-19,
as well as the tightening policies of central banks to combat inflation.


Oil has lost about $50 of its value since reaching its highest level last March,
due to the Russian invasion of Ukraine,
and this decline was supported by the expectations of a global slowdown
after the US Federal Reserve raised interest rates, which caused the dollar to rise to a record level.



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