Central Bank responds to rising inflation with rate hike

source: Sunday Standard
22.06.2008 6:23:02 P

The Central Bank recoiled at the rising fuel induced inflationary pressures on Thursday and adjusted interest rates upward by 50 basis points (half a percent) as part of a global bid by central banks to intervene on weakening global economic systems that threaten to drive the world economy into a recession similar to that last seen in 1970.

In a statement released on Thursday, the bank said the Monetary Policy Committee, which met during the day, decided to increase the bank lending rate —-central bank lending rate to commercial banks —— by 50 bps to 15.5 percent, a move which will stretch-out the end consumers in the coming days as commercial banks respond to the move.
“Since October 2007, inflation trended upwards and has remained above the Bank’s objective range of three-to- six percent, mainly reflecting the global increase in the price of food and oil,” the central bank’s MPC said in a statement.

According to the Central Statistics Office’s consumer price index for the full May month, inflation jumped up by one percent to 12.1 percent against the 11.1 percent recorded at the [continue reading]

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