The U.S. Federal Reserve's decision on Wednesday, the biggest in 22 years, is expected to reverberate around the globe and spur Nigeria and other economies to hike rates in the coming weeks.A 0.5 percentage points interest rate hike announced by the United States’ Federal Reserve on Wednesday is expected to reverberate around the globe and spur Nigeria and other economies to hike rates in the coming weeks.
The new hike marks the bank’s latest effort to contain spiking costs being felt by households around the world in the wake of the coronavirus pandemic and the war between Russia and Ukraine. The new decision of the Fed—which is in charge of the world’s largest economy— is expected to have widespread effects on other countries around the world as most commodity markets, including Nigeria, rely on the dollar.On Thursday, in the wake of U.S’ decision, the Bank of England increased interest rates from 0.75% to 1% in order to tackle soaring inflation that is expected to rise above 10% in the coming months.
Australia’s central bank raised interest rates for the first time in more than a decade, following the lead of Asia-Pacific economies taking action to tame rising inflation. On Tuesday, the Reserve Bank of Australia raised the benchmark interest rate to 0.35 percent, up from a record low of 0.1 percent.
Although the benchmark rate is pegged at 11.5 per cent, banks typically charge manufacturers and other lenders between 12 to 30 per cent on loans.
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