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The article below comes courtesy of Central Bank News, an authoritative source on monetary policy developments.

The past week in monetary policy featured decisions from eight central banks around the world from Europe to Africa. Those that changed interest rates were; Sweden -25bps to 1.75%, Hungary +50bps to 7.00%, and Russia -25bps to 8.00%. Meanwhile, those that announced no changed to interest rates were; Morocco 3.25%, Japan 0.10%, the Czech Republic 0.75%, Ghana 12.50%, and Turkey 5.75%. Brazil also announced some fine tuning measures to the way it pays interest on reserves, effectively further loosening monetary policy settings.

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Many of the central banks which met over the past week made mention of and are particularly wary about the ongoing European sovereign debt crisis, and uncertainty on the global economic growth outlook. Below are listed some of the key quotes from the central banks that announced monetary policy decisions:

Central Bank of Russia (cut rate 25bps to 8.00%):

The said decision was made considering the assessment of inflation risks and risks to the sustainability of economic growth, including those associated with the global economic uncertainty. Narrowing of the gap between interest rates on the Bank of Russia liquidity providing and absorbing operations is neutral in terms of monetary policy stance. It should contribute to restraining money market rates volatility and strengthening of the interest rate channel of monetary policy transmission to inflation.

Hungary (increased rate 50bps to 7.00%):

The Monetary Council decided to raise the base rate by 50 basis points in view of increased perceptions of the risks associated with the economy and upside risks to inflation. If risk perceptions and the outlook for inflation deteriorate significantly further, it may prove necessary to raise interest rates again.

Sweden (cut rate 25bps to 1.75%):

There is still considerable uncertainty regarding the public-finance problems in, above all, the euro area and several euro countries are expected to implement more stringent fiscal tightening than was previously assumed. Growth in the euro area is therefore expected to be low in the period ahead. However, the global economy as a whole is growing at a relatively good rate.

Bank of Japan (held rate at 0-0.10%):

The pick-up in Japan’s economic activity has paused, mainly due to the effects of a slowdown in overseas economies and of the appreciation of the yen. As for domestic demand, business fixed investment has been on a moderate increasing trend and private consumption has remained firm. On the other hand, exports and production have remained more or less flat, due in part to the effects of the slowdown in overseas economies and of the yen’s appreciation as well as of the flooding in Thailand. Improvement in business sentiment has slowed on the whole despite steady improvement in domestic demand-oriented sectors.

There is no major central bank activity scheduled for next week. Happy holidays to all our loyal readers, and may the new year bring you prosperity and happiness.

Source: Central Bank News, December 23, 2011.

Source: Monetary Policy: Central Bank Decisions This Week