Federal Reserve

Time for a hike? World’s central bankers speak out


It's one of the most anticipated Federal Reserve monetary policy decisions for years, with markets still uncertain if the U.S. central bank will unveil its first interest rate hike in nine years on Thursday.

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On the one hand, expectations for a September rate rise have been scaled back amid recent volatility in global markets and signs of weakness in China's economy. But on the other, an improving labor market supports the case for a move and some economists and analysts argue that a rate rise now will remove a layer of uncertainty hanging over global markets.

Any move will also have ramifications for other central banks around the world, some of which, like the Bank of England, are seen waiting on the Fed before making any policy changes of their own.

Here's a summary of recent comments from international central bankers on the prospect of a looming U.S. rate rise.

Haruhiko Kuroda, Bank of Japan Governor:

"When the Federal Reserve raises interest rates that means the U.S. economic recovery is quite robust," he told CNBC.

"You might think that U.S. monetary policy normalisation could adversely affect emerging economies, but I don't think so."

Haruhiko Kuroda
Tomohiro Ohsumi | Bloomberg | Getty Images

Agustin Carstens, Bank of Mexico Governor:

"If the Fed tightens, it will be due to the fact that they have a perception that inflation is drifting up, but more importantly that unemployment is falling and the economy is recovering," Carstens told Reuters on the sidelines of last month's economic symposium in Jackson Hole, Wyoming.

Agustin Carstens
Susana Gonzalez | Bloomberg | Getty Images

Elvira Nabiullina, Central Bank of Russia Governor:

"There are two scenarios possible that raising interest rates will have, bearing in mind that market players are expecting this particular event and in many ways have priced it into the valuation of their assets. And in this (first) case there are not going to be any dramatic changes in the market environment," she told CNBC.

"But the second probability is also possible – that markets may respond in a very nervous way and then generally speaking, increase global turbulence that may affect the Russian economy as well."

Elvira Nabiullina
Andrey Rudakov | Bloomberg | Getty Images

Raghuram Rajan, Reserve Bank of India Governor:

"My position over time has been don't do it (hike rates) when the world is in turmoil," he told CNBC from Jackson Hole in August.

"It's a long anticipated event – it has to happen at some time, everybody knows it has to happen – but pick your time. I think if the volatility we've seen calms down as we've seen, it could happen sooner rather than later."

India's Rajan on inflation

Guy Debelle, Reserve Bank of Australia Assistant Governor (Financial Markets)

"This is the most well telegraphed rate rise in the history of rate hikes," Debelle was quoted by local media as saying on Wednesday.

"If you're not ready for it, you sure as hell have been warned."