Jakarta –
The Central Bank of the United States (USA), the Federal Reserve (The Fed), recently raised its key interest rate by 75 basis points to 3.75-4%. The increase in the key interest rate strengthened the position of the US dollar against almost all currencies. So what is the impact?
Banking professional, Abiwodo said, the interest rate hike had a great impact. According to him, this had an impact on high credit interest rates, which then translated into a weak economic cycle.
He also said this encourages people to save their money in the bank.
“Now, due to the Fed’s key interest rate hike, the US key interest rate range has reached 3.75-4%. For credit, higher interest rates are obviously terrible.” As a result, investment values tend to fall and economic turnover weakens. But conversely, high bank interests may encourage people to save their money in the bank,” according to Abiwodo in his statement on Sunday (11/13 /2022).
“This is what has happened in recent days. The aggressiveness of the US central bank in raising the key interest rate has prompted market participants or investors to look for a safe haven, i.e. a safe place to put their dollars. As a result, the dollar strengthened against all currencies,” he added.
According to him, the rupee was not the only currency that weakened, but many currencies were hit. Not only that, cryptocurrencies have also weakened.
The market capitalization of cryptocurrencies fell by 1.82% to $998.19 billion. This happened because when the Fed raised its benchmark interest rate again, investors started to steer clear of risky assets like cryptocurrencies.
On the other hand, the weakening cryptocurrency market has become an impetus for central banks to reassert the risk of cryptocurrency fluctuations.
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