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  • Monetary Policy Week In Review – Feb 23-28, 2015: China Boosts Number Of Rate Cuts This Year To 23 Vs 11 In 2014

    Last week China, Israel and Turkey added their names to the ballooning list of central banks that have eased their monetary policy stance this year in response to the twin forces of disinflation and sluggish economic growth.
    During January and February 23 central banks cut their benchmark lending interest rates, more than twice the 11 rate cuts seen in the first two months of 2014.
    And the rapid pace of cuts to policy rates doesn't reflect just how loose global monetary policy has become as the European Central Bank ECB) this month embarks on full-scale quantitative easing as its begins purchasing 60 billion euros a month of euro zone government and European institutional bonds with its expanded asset purchase program scheduled to run through September 2016.
    Central banks in advanced economies, with the Federal Reserve the great exception, have been especially active so far this year in easing their policy stance to head off the twin threats of deflation and economic stagnation.
    Six of this year's 23 rate cuts have come from advanced economy central banks: Switzerland, Denmark, Canada, Australia, Sweden and Israel.
    In comparison, Israel was the only advanced economy central bank to cut its rate in the first two months of 2014.
    A hallmark of monetary policy this year is the use of negative rates as the boundaries of monetary policy are pushed further into the unknown.
    Benchmark policy rates used by the SNB and Sweden's Riksbank have been reduced to negative territory while the ECB and Denmark's Nationalbank have adopted negative deposit rates.
    Another feature this year has been the surprises sprung by central banks on financial markets, most glaringly the Swiss National Bank's (SNB) decision to scrap its cap on the franc's exchange rate against the euro, a move that many observers feel has damaged its credibility.
    Singapore's monetary authority also took markets by surprise - though by a lesser extent than the SNB - by slowing the pace of the appreciation of its dollar against a basket of key currencies in response to the fall in crude oil prices and the accompanying lowering of inflation.
    Central banks in emerging markets have also been very active this year and on several occasions caught financial markets by surprise. India's rate cut in January came at an unscheduled policy meeting while investors also were surprised by Russia's and Indonesia's rate cuts.
    Nine of this year's rate cuts have come from emerging market central banks - three times the number of cuts seen in the first two months of 2014 - as they take advantage of lower commodity prices to stimulate economic activity in response to weaker global growth.
    China became the latest emerging market central bank to cut rates on Saturday, joining India, Chile, Peru, Egypt, Russia, Indonesia and Turkey, which has cut rates twice.

    LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

     


    TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCILATESTNEW RATECURRENT RATE1 YEAR AGO
    ISRAELDMCUT0.10%0.25%0.75%
    SRI LANKAFMUNCH.6.50%6.50%6.50%
    FIJI UNCH.0.50%0.50%0.50%
    HUNGARYEMUNCH.2.10%2.10%2.70%
    TURKEYEMCUT7.50%7.75%10.00%
    KYRGYZSTAN UNCH.11.00%11.00%6.00%
    EGYPTEMUNCH.8.75%8.75%8.25%
    MOLDOVA UNCH.13.50%13.50%3.50%
    KENYAFMUNCH.8.50%8.50%8.50%
    ANGOLA UNCH.9.00%9.00%9.25%
    BULGARIAFMUNCH.0.01%0.01%0.04%
    CHINAEMCUT5.35%5.60%6.00%

    This week (Week 10) central banks from eight countries or jurisdictions are scheduled to decide on monetary policy: Australia, Canada, Brazil, Poland, Albania, Malaysia, the United Kingdom and the euro area.

    TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCILATESTDATECURRENT RATE1 YEAR AGO
    AUSTRALIADM 3-Mar2.25%2.50%
    CANADADM 4-Mar0.75%1.00%
    BRAZILEM 4-Mar12.25%10.75%
    POLANDEM 4-Mar2.00%2.50%
    ALBANIA  4-Mar2.00%2.75%
    MALAYSIAEM 5-Mar3.25%3.00%
    UNITED KINGDOMDM 5-Mar0.50%0.50%
    EURO AREADM 5-Mar0.05%0.25%

    www.CentralBankNews.info

    Mar 02 10:29 AM | Link | Comment!
  • Monetary Policy Week In Review – Feb 2-6, 2015: One-Third Of All Central Bank Decisions Result In Rate Cuts

    Last week in global monetary policy another four banks (Australia, Romania, Jordan and Denmark) lowered their policy rates, boosting the number of rate cuts so far this year to 19.
    This means that one-third of this year's 56 policy decisions by central banks have resulted in rate cuts, illustrating how active central banks have been in adjusting their policy stance to the growing risks to the global economy and the prospect of tighter U.S. monetary policy.
    In comparison, only six central banks had lowered their policy rates at this point in 2014, the equivalent of 11 percent of 54 policy decisions through the first six weeks of last year.
    Meanwhile, Ukraine was the only central bank to raise its rate last week (by a sharp 550 basis points), pushing the number of rate increases worldwide so far this year to seven, or 12.7 percent of all policy decisions.
    While the rate cuts have been fairly evenly divided between central banks in advanced, emerging and frontier markets, the rate increases are mainly taking place in smaller economies.
    Four of these seven rate rises have come from central banks that are fighting plunging currencies and inflationary pressures due to their close economic and financial ties to Russia: Belarus, Armenia, Kyrgyzstan and Ukraine.
    The other three central banks that have raised their rates so far this year are Brazil, Trinidad & Tobago and Mongolia.

    LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

     


    TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCINEW RATEOLD RATE1 YEAR AGO
    ANGOLA 9.00%9.00%9.25%
    AUSTRALIADM2.25%2.50%2.50%
    INDIAEM7.75%7.75%8.00%
    ROMANIAFM2.25%2.50%3.75%
    ICELAND 5.25%5.25%6.00%
    POLANDEM2.00%2.00%2.50%
    JORDANFM4.00%4.25%4.25%
    UNITED KINGDOMDM0.50%0.50%0.50%
    CZECH REPUBLICEM0.05%0.05%0.05%
    UKRAINEFM19.50%14.00%6.50%
    DENMARK (DEPO RATE)DM-0.75%-0.50%-0.10%

    This week (Week 7) central banks from 10 countries or jurisdictions are scheduled decide on monetary policy: Zambia, Mauritius, Armenia, Georgia, Mozambique, Philippines, Sweden, Chile, Peru and Uganda.

    TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCIDATECURRENT RATE1 YEAR AGO
    ZAMBIA 9-Feb6.50%6.50%
    MAURITIUSFM9-Feb4.65%4.65%
    ARMENIA 10-Feb9.50%7.50%
    GEORGIA 11-Feb4.00%4.00%
    MOZAMBIQUE 11-Feb7.50%8.25%
    PHILIPPPINESEM12-Feb4.00%3.50%
    SWEDENDM12-Feb0.00%0.75%
    CHILEEM12-Feb3.00%4.25%
    PERUEM12-Feb3.25%4.00%
    UGANDA 13-Feb11.00%11.50%

    www.CentralBankNews.info

    Feb 08 11:10 PM | Link | Comment!
  • Monetary Policy Week In Review – Dec 15-19, 2014: Russia Rate Hike, Swiss Cut Show Impact Of Plunging Oil

    Russia's 650 basis points emergency rate hike and Switzerland's imposition of negative rates last week were the latest consequences of the plunge in crude oil prices during the last six months.
    With safe-haven capital flows from Russia adding to the perennial upward pressure on the Swiss franc, the Swiss National Bank (SNB) last week joined the small, but select group of central banks - Sweden's Riksbank, Denmark's Nationalbank and the European Central Bank (ECB) - that have experimented with negative policy rates in the latest twist to global monetary policy
    Whether last week's stabilization in oil prices is the first sign of a trend reversal is too early to tell but it's clear that lower oil prices are exacerbating the deflationary trends in the euro zone and making it even tougher for Japan to escape the "deflationary mindset."
    But for most oil-importing countries, and especially emerging and frontier markets, the decline in oil has been greeted with open arms as it helps compensate for inflationary pressures from the widespread currency depreciation against the U.S. dollar.

    Through the first 51 weeks of this year, the 90 central banks followed by Central Bank News have cut their policy rates 65 times, or 13.6 percent of this year's 479 policy decisions, marginally higher than 13.5 percent at the end of the third quarter but up from 12 percent at the end of the first half, and 12 percent at the end of the first quarter.
    Meanwhile, rates have been raised 51 times, or 10.6 percent of all policy decisions, up from 10.2 percent at the end of September, 9.3 percent at the end of June and 8.7 percent at the end of March.
    With Russia's rate rise, central banks in emerging markets have raised rates 24 times this year, almost equaling the 25 rate cuts, an illustration of how emerging markets have had to raise rates to offer competitive returns to global investors who are setting their sights on the first rate rise in the United States at some point in 2015.
    As a group, emerging markets have thus accounted for 47 percent of the world's rate increases this year, easily outpacing the four rises by New Zealand, the only developed market central bank that has raised rates this year.
    Central banks in frontier markets have raised rates five times and cut them 14 times while central banks in other markets - which includes such diverse economies as Iceland, Albania and Ghana - have raised rates 17 times, the exact same number of times they have cut rates.
    The Global Monetary Policy Rate (GMPR) - the average rate of the 90 central banks followed by Central Bank News - jumped to 5.69 percent from 5.62 percent from the previous week, pushed upward by Russia's rate hike.
    At the end of the third quarter GMPR was 5.54 percent, only slightly up from 5.53 percent at the end of the second quarter and first quarters.
    Russia has now raised its rate by a total of 1150 basis points, topping Ukraine's rate rise of 750 points and Ghana's 500 point hike to take the top spot among this year's rate-hikers.

    LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

     


    TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCINEW RATEOLD RATE1 YEAR AGO
    RUSSIAEM17.00%10.50%5.50%
    SWEDENDM0.00%0.00%0.75%
    MOROCCOFM2.50%2.75%3.00%
    HUNGARYEM2.10%2.10%3.00%
    CZECH REPUBLICEM0.05%0.05%0.05%
    THAILANDEM2.00%2.00%2.25%
    UNITED STATESDM0.25%0.25%0.25%
    GEORGIA 4.00%4.00%3.75%
    ALBANIA 2.25%2.25%3.00%
    SWITZERLANDDM-0.25%0.25%0.25%
    JAPANDMN/AN/AN/A
    COLOMBIAEM4.50%4.50%3.25%

    This week (Week 52) three central banks or monetary authorities are scheduled to decide on monetary policy: Angola, Armenia and Turkey.

    TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCIDATECURRENT RATE1 YEAR AGO
    ANGOLA 22-Dec9.00%9.25%
    ARMENIA 23-Dec6.75%7.75%
    TURKEYEM24-Dec8.25%4.50%

    www.CentralBankNews.info

    Dec 22 12:43 AM | Link | Comment!
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