Global Central Banks Raise Rates Following Federal Reserve Hike
Central banks in India and Oman raised interest rates following a Federal Reserve hike to combat inflation and maintain currency stability.
The Federal Reserve System initiated a global trend of monetary tightening with a 25-basis-point rate hike on September 16, 2026, to combat inflation. This move triggered immediate responses from several other nations seeking to stabilize their economies and currencies.
In Asia and the Middle East, the Reserve Bank of India and the Central Bank of Oman both raised their repo rates by 25 basis points. The Central Bank of Oman increased its rate to 4.50 per cent specifically to maintain the Omani Rial's peg to the U.S. dollar. While most Gulf central banks followed the U.S. lead, Kuwait opted not to raise its rates.
North American policy remains in a state of anticipation. The Bank of Canada is expected to hold its key interest rate at 2.25% next Wednesday. However, economists suggest the first rate hike since 2023 could arrive in December or January, driven by a 3.1% increase in the September consumer price index and rising energy prices.
