The central bank’s policy of raising the base interest rate has increased the likelihood that it will be raised again, and inflationary pressure continues to build. On one hand, the market is saying that not only a one‑time adjustment but also additional successive increases in the near future are likely. In this mood, investors expect three rounds of rate hikes (three raises) in the short to medium term.
The central bank policy aims at keeping inflation within target while achieving economic growth and full employment by adjusting the base interest rate. Recent months of sustained inflationary pressure have prompted a re‑examination of the monetary policy. Accordingly, the financial market believes that additional rate hikes are required to bring inflation under control.
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