The coronavirus outbreak sparked a global price boom, which was fueled even more by Russia’s invasion of Ukraine. As a result, the US dollar, which is regarded as a safe haven, has grown tremendously in the last six months.
This recent rally has returned the greenback to a two-decade high. The US dollar index was trading at 104.55 at the time of writing, up 10.84% in six months and 4.31% in a month.
The surging dollar has prompted many central banks to abandon a longstanding preference for weaker exchange rates, shifting from encouraging growth to bringing down inflation.
Despite rising inflation, countries such as Nigeria and Japan have resisted the impulse to raise interest rates. Inflation in Nigeria reached 15.92% in March, up from 15.7% in February 2022.
Japan’s inflation is continuing to rise, reaching a 26-month high as more businesses pass on rising raw material and energy costs to consumers. In March 2022, Japan’s inflation increased by 0.8%.