Tuesday, October 6, 2009

Global Interest Rates and Currencies: A Race to the Bottom

Australia has done it, raising rates and confirming our post from yesterday. Suicidal move? We will see. However, these are the current interest rates charged by the major central banks of the world. It is a race to the bottom.

See who are the carry-trade financiers:

Canada: 0.25%
England: 0.50%
Japan: 0.10%
ECB (Europe): 1.00%
U.S. Fed: 0.25%
Australia: 3.25% (new!)
Switzerland: 0.25%


The BRIC has also been cutting rates, but it's a very different story:

China: 5.31%
India: 4.75%
Brazil: 8.75%
Russia: 10.0%

You can see why the non-pegged currencies have appreciated.

Historical charts:

(please click to enlarge) Source: http://www.tradingeconomics.com/

Other nations:

New Zealand: 2.50%
Korea: 3.00%
Egypt: 8.25%
South Africa: 7.00%
Hong Kong SAR: 0.50%
Taiwan: 1.25%
Czech Republic: 1.25%
Hungary: 7.50%
Iceland: 12.00%
Norway: 1.25%
Poland: 3.50%
Slovakia: 1.75%
Sweden: 0.25%
Turkey: 7.25%

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1 comment:

Deming said...

Later this month, watch Norway as I suspect Norway will raise rates next.

Australia's RBA meets again next month and it's not out of the question IMO that they could raise rates another 0.25 again.


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