“We see the effective interest rate rising to at least 5.50 percent in the first half of this year.”
In addition to inflation so far, Ima Sammani, FX Market Analyst at Monex, added that “regional risks have increased due to heightened geopolitical tensions between Russia-Ukraine” which would cause further concern for central banks.
Although particularly high, inflation is not unique to these countries within the continent with the Eurozone meanwhile seeing inflation at 5.1 percent.
In contrast, though the European Central Bank has been reluctant to raise interest rates with its president Christine Lagarde repeatedly warning against rushing a tightening of policy.
The ECB’s stance has attracted some resistance, notably from Germany where inflation has reached a near 30 year high, with head of German central bank the Bundesbank Joachim Nagel recently suggesting interest rates could be raised before the end of 2022.