Central bank policy rates
Using data from the Bank for International Settlements, we created a dashboard displaying changes to central bank policy rates over the last year. It clearly shows we’re in the midst of a major global tightening cycle. Central banks across emerging markets (EMs) have seen their currencies depreciate against the dollar while also experiencing high inflation rates. In anticipation of the Federal Reserve tightening that has just begun, EMs have been forced to increase their own policy rates in recent months to ward off further inflationary pressures and currency depreciations.
Here’s another way to visualise central bank activity. This chart compares the net balance of policy hikes against cuts from 115 central banks. As you can see, the number has recently turned positive, meaning an increasing number of central banks are now tightening monetary policy.