Central Bank Rates Around the World

Below we highlight the central bank rates of major countries and regions around the world.  We also provide where the rates stood just before the Fed cut the US Fed Funds Rate from 5.25% to 4.75% back in September. 

As shown, Brazil currently has the highest central bank rate at 11.25%, followed by Russia (10%) and China (7.29%).  Japan is by far the lowest down at 0.50%. 

Since September, the US has cut rates by 325 basis points, which ties Hong Kong for the biggest cut in rates.  Canada has cut the third most at 1.5%, and the UK is the only other country in the list that has cut (-0.75%).  Five countries have raised rates since the US starting cutting -- China, Mexico, Australia, Russia and Brazil.

In the bottom chart, we provide a historical look at the central bank rates of G-7 countries since the start of 2006 (France, Italy and Germany are under the ECB).  As shown, the US has been the most aggressive easer of the bunch during the credit crisis.

Comments

[PacificGatePost]

WHY DO WE THINK THE FED WILL MAKE THE RIGHT MOVES?

Didn't America get into this mess with the help of the Fed in the first place?

pacificgatepost.blogsp...

[icandoitdon]

the fed almost never gets it right. they're incompetent and here is why:

the fed has consistently erred on the side of easing whenever it apeared that the economy might enter a soft spot. always. why have they done this? because they see their primary mission as promoting growth, which is flat out wrong.

there is nothing more important than the stability of the financial system. this requires a sound banking system built on sound lending standards, adequate capital requirements, price stability and a price of credit commensurate with the degree of risk assumed. the fed was virtually asleep at the switch when it came to this simple but vital regulatory mandate. it cared only about the availability of cheap money and lots of it while ignoring the effects of subprime lending and related standards, the practice of securitization that shifted the risk of lending to unwary investors, and the emergent risk of derivative financial instruments with a myriad of counterparties that companies themselves often don't understand and cannot even quantify. many are off balance sheet, with investors blind to the land mines that exist in financial and non-financial companies alike. it took years for the full effects of these to come to fruition and the fed did nothing until it blew up in their face. and their initial response was...more cheap credit. incredible.

the steady decline of the u.s. dollar and the parabolic spike in key commodities that have been ongoing for several years now is very much a function of the loss of faith in our financial system. this belongs directly at the doorstep of the u.s. government, including our incompetent federal reserve.

[tramp]

icandoit.. 100% agree.. now what i want to know is: Are you an economist? or just smarter than all the economists who keep saying "Ben had to bail them out"

[icandoitdon]

my technical background is corporate finance and accounting.

we all have the benefit of hindsight in drawing judgments about our "leaders." but it is my view that certain of the fed's errors were glaring...and pushed our financial system to the brink of the abyss. that kind of incompetence should not be forgotten or forgiven. to use a military analogy, it is traitorous.

those economists who defend the fed are like one doctor defending another in a malpractice trial. "yes he killed the patient but we must give him an "A" for making an effort to save his life." results matter...not good intentions.