The pace of interest rate hikes by advanced and rapid market central banks continued in March although the scale of increases was somewhat tapered as turmoil in the banking sector clouded the outlook for global growth.
In March, the market saw six interest rate hikes in eight meetings by the central bank that oversees the 10 most traded currencies. Policymakers in Australia, Switzerland, Norway and Britain joined the U.S. Federal Reserve. and the European Central Bank in raising its key lending rate by 200 basis points (bps). Policymakers in Japan and Canada kept the benchmark unchanged.
This follows six interest rate hikes of 250 basis points in six meetings by G10 central banks in February.
March has been a challenging season for markets and policymakers, with growing expectations that the U.S. Federal Reserve's rate will rise. could peak at 6%, before the collapse of several U.S. banks. and the Credit Suisse crisis that rocked global markets, raising concerns about financial stability and clouding growth prospects.
"The Fed and other central banks have made it clear the banking crisis will not prevent them from tightening policy further," said Wei Li, head of global investment strategy at BlackRock Investment Institute.
However, the world's leading central banks are openly considering ending rate hikes early, not least because of the recent financial turmoil.
On the other hand, oil prices surged on Monday as OPEC's surprise production cuts could add new inflationary pressures, analysts said.
