Interest Rates August 2007

• The Bank of England raised its bank rate in July by0.25 percent to 5.75 percent, continuing a cycle of increases that began in August 2006 when the rate was raised to 4.75 percent. A booming UK economy has caused the BOE to keep raising rates.
  

• The Bank of Canada increased its overnight funding rate in July 0.25 percent to 4.5 percent, ending a long period of rate neutrality. The last rate hike for the Great White North came in May 2006, when rates increased to a multi-year high of 4.75 percent.

• The Central Bank of Brazil dropped its selic rate 0.50 percent in July to an all-time low of 11.5 percent. The cut is the 17th since September 2005, when the Selic was 19.75 percent.

• The Central Bank of Chile raised its discount rate 0.25 percent in July to 5.25 percent. The rate hike comes after Chile dropped rates 0.25 percent in January for the first time in five years.
  

• The Bank of Israel increased its short-term lending rate in July, ending a long period of loosening rates with a 0.25-percent hike to 3.75 percent. It was the first rate increase in a year after seven straight decreases.
  

• The People’s Bank of China increased its one year yuan lending rate 0.27 percent to 6.84 percent in July.

• The Bank of Indonesia dropped its reference rate again in July 25 basis points to 8.25 percent. The rate cut was the third in as many months, the 12th in 13 months, and the 13th since April 2006 when the rate stood at 12.75 percent.

• The Bank of Korea raised its overnight call rate 25 basis points in July 4.75 percent. The hike was the first in a year but is the sixth increase since the end of 2004.

• The Central Bank of the Philippines dropped its overnight borrowing rate significantly, cutting the rate 1.5 percent to 6 percent in July. The Philippines had not dropped rates in more than five years.

• The Bank of Thailand dropped its 1-day (repo) rate 0.25 percent to 3.25 percent in July, its fifth rate cut in 2007. The cuts follow more than four years of steady increases.