In many countries, consumer prices are rising significantly. Central banks have the ability to counteract this via monetary policy means - by raising interest rates, thereby restricting access to credit and slowing down value creation. As of early September 2022, the majority of central banks worldwide had carried out rate hikes - some small and others rather large. As seen in data available on Trading Economics, a few countries also kept rates the same or even cut then, but these were often nations experiencing severe economic turmoil or those that are cut off from world markets to some extent.
In the face of inflation, the European Central Bank raised rates for the first time in eleven years in July, but central bank interest rates still remain low in Europe. The United States’ Fed, which like the ECB stuck to zero interest for a long time, hiked rates more aggressively as the U.S. was affected by inflation more severely than many other countries. The upper end of the interest rate range stood at 2.5 percent in the U.S. most recently.
Turkey and China are among the countries that cut in interest rates in 2022 and have a lower rate now than they had on Jan 1, 2022. China's economy is not struggling with high inflation, but it is forecast to face a number of downside risks, including power shortages, virus outbreaks and weak consumption. According to Bloomberg, the People’s Bank of China will therefore presumably relax its monetary policy and support economic growth by enabling more liquidity.
The monetary policy of the Turkish President Recep Tayyip Erdogan is criticized by Bloomberg experts and is described as "unorthodox". In Turkey, consumer prices have risen by up to 19 percent. Turkey's central bank recently lowered its key interest rate nevertheless. Erdogan is evidently of the opinion that high interest rates would conversely fuel inflation, while low ones would stimulate loans and investments.