Macroeconomy: Global Central Banks Cut Interest Rates Such As Penguin Diving

The Holland Cooperation Bank (Rabobank) team pointed out that the Bank of Thailand and the Bank of Korea unexpectedly joined the interest rate reduction force this week, lowering interest rates by 25 basis points, making the central bank that cut interest rates this year (2015) increased to 24.

The Holland Cooperation Bank pointed out that another bank cut interest rate yesterday (March 11th). (twenty-third this year), this is the Thailand central bank's interest rate dropped to 1.75%, a decrease of 25 basis points.

Less than 24 hours after the Thailand central bank cut interest rates, the Bank of Korea also followed up quickly.

Since Thailand's interest rate has remained unchanged in the past seven months in the sluggish data, the rate cut is somewhat at a loss. According to the official outlook, the future is bright (although many countries are directly opposed to the economy).

In view of the structural problems of Thailand in many respects, the reduction of the 25 base points will not reverse the situation. However, the decision of the Thailand central bank is the right way.

The US dollar rose to US $32.9 from the Thai baht from 32.3 US dollars.

Before that, the Central Bank of Thailand maintained its stability and interest rate, ignoring its domestic weakness.

With the pressure of surplus narrowing, the Thai baht became one of the best Asian currencies in the September 2014 against the US dollar, and now Thailand has become another attempt to stimulate the country's economic recovery.

A country that drives the economy.

Holland Cooperation Bank said that the ROK also leaped interest rates to 1.75%, down 25 basis points, making it the twenty-fourth country to cut interest rates so far.

Further easing actions in the Asia Pacific region are considered to be partly the result of China's largest economy in the near future.

The performance is sluggish, especially the impact of import demand reduction.

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Russia has been making waves in the international political situation, resulting in a 46% derogatory reduction of ruble, which has fallen to the lowest level in history.

The currencies of Belarus, Azerbaijan and Moldova, including Ukraine, are outstanding in the devaluation competition of the international foreign exchange market.

Looking at the world, it is difficult to find a bigger currency in addition to Brazil Real and lari, Larry.

The above currencies dropped more than 13% against the US dollar, while the three currencies led by Belarus rouble were over 25%.

The flood of the ruble devaluation flooded the neighbouring countries, and of course caused trouble.

More and more cheap Russian goods are pouring into the surrounding countries, weakening their trade balance.

According to the theory of economics, devaluation helps to reduce the competitiveness of the currency to the rouble, and it will also bring a series of new problems: to push up inflation and pay more for foreign debts.

Charles Robertson, chief economist of Renaissance Capital Ltd., a London based hedge fund, told Bloomberg News:

These countries can do nothing about it, and it will take many years to relax their economic ties with Russia.

These former Soviet countries and Russia have similar economic structure and are highly dependent on the energy export oriented economy.

Therefore, the sharp decline of the current international oil price is also a key factor in the heavy losses of the currency.

Under great pressure, Belarus announced its depreciation in January this year and relaxed capital controls in February.

Yesterday (March 11th), Belarus rouble fell to 15275 against the US dollar, a record low.

Wall Street noted that Ukraine simply raised the benchmark interest rate to 30% last week, and the interest rate is high.

Its currency has dropped to 34.247 against the dollar in February, a record low.

The currencies of Georgia and Armenia have both fallen by 14% in the past year.

To this end, the two countries were forced to raise interest rates.

However, little effect has been achieved.

Per Hammarlund, chief emerging market strategist at SEB AB, Sweden, explains this:

It's a bit like a rubber band: you pull it, but it will eventually come back in vengeance.

They will resist for a while, but the situation ahead will be more serious than before.