Palaniappan Chidambaram, the Finance Minister of India, said yesterday that the latest emergency rate cut by the Fed will probably influence the next interest rate decision by the Reserve Bank of India.
The Australian dollar gained yesterday after the Federal Reserve announced an emergency rate cut from 4.25% to 3.50%. It also continued to gain today through the most of the Asian trading session, but has already went down past the daily opening price.
Today, the Federal Reserve System decreased the national benchmark interest rate by 0.75% — from 4.25% down to 3.50%. This was an emergent move to stimulate the financial liquidity amidst the tumbling stock markets.
The European Central Bank council member and the governor of the Bank of Italy, Mario Draghi said yesterday that the monetary policy should be tightened in case the inflation in Eurozone will start to cross the target borders.
Chilean peso gained yesterday against other currencies, notably against the U.S. dollar, after the Central Bank of Chile President, José de Gregorio, commented that the bank will have to increase rates again on the next meeting.
Central Bank of Chile decided yesterday to raise the main national lending rate from 6.00% to 6.25% in order to reduce the threat level of the rising inflation, which has now reached its highest level in almost ten years.
Chile’s Consumer Price Index increased unexpectedly last month by more than analysts forecasted, increasing the odds that the Central Bank of Chile will raise the refinancing interest rate on the next week’s meeting to fight the record breaking high inflation.
Yesterday Chilean central bank increased its interest rate by 0.25 basis points up to 6.0%. It was the first rate hike in Chile since September 13 this year.
The Central Bank of Chile will be releasing its statement with the target interest rate. The current interest rate is maintained at 5.75% after three rate hikes by 0.25% going in a row from July to September 2007. Majority of the analysts surveyed about the forthcoming rate decision agree that the Chilean interest rate will remain at the same level.
The United Arab Emirates decided to cut their bank repository rate by 0.25% to 5.25%; Saudi Arabia decreased its benchmark rate for deposits also by 0.25% to 4.0%; Qatar and Bahrain reduced their deposit rates by the same amount - 0.25% to 4.0%. Kuwait refrained from changing the country’s interest rate, because they’ve already removed their currency’s peg to dollar back in May 2007.