Interest rates up. Not only in Poland.

On Wednesday, the Monetary Policy Council (MPC), for the third time this year, decided to raise interest rates in Poland, thus responding to galloping inflation. In line with market expectations, the rates increased by 50 basis points (bp), which raised the main rate from 1,25 percent up to 1,75%. The last time it was so high in March 2015, when the Council cut it from 2 percent. up to 1,50 percent

The world is trying to contain inflation

Yesterday, the rates were determined not only by our MPC, but also by the central banks of Canada and Mexico. The former left the rates unchanged, keeping the main rate in Canada at 0,25%. This decision was awaited by the market, which expects a rate hike in Canada in the first quarter of 2022 at the earliest.

Bank of Brazil on the other hand, it increased the cost of money by as much as 200 bp to 9,25%, thus fighting the soaring inflation which Brazil has jumped from 4,5 percent this year. up to 10,7 percent Every year. This decision was expected by everyone.

Central banks will be the main players in the financial markets ahead of Christmas. Especially next week, when between 14 and 17 December decisions on monetary policy will be made by as many as 14 different banks around the world. Including the big ones like the American Fed, The European Central Bank, Bank of England, Bank of Japan i Bank of Switzerland. And although in these 5 cases the change in interest rates is not expected, the suggestions as to the path of the future normalization of the monetary policy may have a significant impact, inter alia, ba the currency market. 

December meetings of central banks. Source: @Macronextcom

On the other hand, one should expect interest rate increases, inter alia, in Hungary, Mexico, Norway and Russia. Against this background, Turkey will be a phenomenon, where, under pressure from President Erdogan, another interest rate cut is forecast, despite the over 20% inflation in this country.