Fed sent a very strong and powerful message on August 26 that it will implement the steepest rate hikes in the coming months to curb the highest domestic inflation in the United States in 40 years.
Fed is generally expected to raise rates by 50 to 75 basis points in September, depending on the August inflation index released on September 13. If inflation is still high, then a 75 basis point rate hike is inevitable.
If the Fed raises rates by 75 basis points in September, the target range for the U.S. federal prime rate will be raised from 2.25% to 2.50% to 3.00% to 3.25%. This rate will be higher than our overnight policy rate (OPR), which will undoubtedly lead to more domestic capital outflows and accelerate the depreciation of the RM.
Our national bank will hold a monetary policy meeting on September 7 and 8 and will announce whether to raise the overnight policy rate (OPR) at the end of the meeting on September 8.
