Insight - The need to raise interest rates explained

The central bank has to rebuild monetary policy buffer for future shocks. It is confident that a gradual normalisation of interest rate will not hurt economic growth although it recognises that the downside risks to growth will remain.

IN an almost synchronised manner, central banks in the world with the US Federal Reserve (Fed)leading the pack, are rushing to raise their key interest rates in a bid to tame soaring inflation and anchor inflation expectations.

The Russia-Ukraine military conflict-triggered energy and commodity prices surge in recent months had exacerbated the already elevated global inflationary pressures.