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although the federal reserve was not the first to "take the lead" (cut interest rates) in this round of global central bank rate cuts, as the central bank with the greatest influence on the direction of global monetary policy "took two in one go" (directly cut interest rates by 50 basis points) last night, the "long run" of this round of global rate cuts is likely to accelerate...

many industry insiders said that as the federal reserve sounded the clarion call for a substantial interest rate cut last night, this is undoubtedly a positive signal for non-us central banks that are also currently worried about their respective domestic economic growth.

after the federal reserve announced a rate cut, several central banks whose interest rates are directly linked to or basically follow the federal reserve have adjusted their respective benchmark interest rates one after another on thursday. they include:

the central bank of kuwait cut its interest rate by 25 basis points to 4%.

the central bank of bahrain cut its overnight deposit rate by 50 basis points to 5.50%.

the uae central bank cut its overnight deposit rate by 50 basis points to 4.90%.

the qatari central bank cut its deposit rate by 55 basis points to 5.2%, its repurchase rate by 55 basis points to 5.45%, and its lending rate by 55 basis points to 5.70%.

the hong kong monetary authority also announced on thursday that it would cut the base interest rate by 50 basis points to 5.25%, effective immediately.

in the past few months, although some major central banks in the world, including the eurozone, the united kingdom and canada, have started to cut interest rates before the federal reserve, even though some of these central banks have cut interest rates 2-3 times, they have not really widened the gap with the federal reserve.——compared with the more common 25 basis point rate cuts by central banks around the world, the fed cut interest rates by 50 basis points in one go this time. compared with central banks such as the european central bank that have cut interest rates twice, this is equivalent to instantly narrowing the gap.

although central banks in some other countries, including india, south korea and south africa, have previously remained on hold, the fed's latest easing move may apparently encourage these countries to "take the first brave step."

more central banks are set to join the rate cut movement

analysts say that for many central banks, "preemptively" cutting interest rates before the fed could put their currencies at risk of depreciation - when their interest rates are lower than those of the united states, their currencies are easily targeted by short sellers. the depreciation of their currencies, in turn, could easily push up the prices of their imported goods, creating a new round of inflationary pressure.

south africa belongs to this group.south african reserve bankthe fed could be the next to cut borrowing costs, with its interest rate meeting scheduled for thursday.

jason tuvey, an economist at capital economics, said the fact that the federal reserve appears set to launch a series of rate cuts will reassure officials at other central banks that at least their currencies won't fall again because of their own actions.

many of the non-us central banks that have not yet lowered borrowing costs are located in asia, where inflation has risen less than in other parts of the world, leading to smaller tightening of policy by central banks in the region. with the slowdown in cpi growth and the easing of potential currency depreciation risks after the fed's rate cut, these central banks will inevitably have more motivation to join the rate cut camp.

according to jpmorgan chase economists,reserve bank of indiathere is hope that the interest rate cut will be reduced next month.bank of korea and bank of thailandaction may also be taken before the end of the year.

earlier on wednesday, the federal reserve was expected to take action to cut interest rates.bank indonesiathe central bank unexpectedly announced a 25 basis point cut in its benchmark interest rate to 6%, the first rate cut by the central bank since february 2021. the central bank noted that investors now expect the federal reserve to cut interest rates faster than expected earlier this year, which should support the rupiah.

“these developments have led to a further reduction in uncertainty in global financial markets and an increase in foreign capital inflows to developing countries, including indonesia,” bank indonesia said.

for latin american and other central banks that have already started cutting interest rates, the fed's latest move will also eliminate some of the risks they face. "most central banks are probably celebrating the upcoming series of rate cuts from the fed," bank of america economists wrote in a recent note to clients.