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  • Monetary Policy Week In Review – Dec 8-12, 2014: Most Central Banks Welcome The Impact Of Lower Oil On Inflation

    Last week the plunge in oil prices over the last six months took center stage in global monetary policy and financial markets.
    But while stock market investors have become unsettled over the collapse in crude oil prices, most central banks welcome the impact of lower oil prices on inflation and inflation expectations.
    The central banks of Switzerland, New Zealand and Sri Lanka were among the 15 central banks that met last week to point out how lower oil prices will hold back inflation and allow the economic expansion to be sustained for longer than expected along with a more gradual rise in interest rates.
    But oil producing nations, such as Norway and Russia, are already feeling the pinch from the plunge of more than 40 percent in crude oil prices since late June.
    Last week Norway cut its policy rate by 25 basis points due to the expected hit to economic growth and employment from lower export earnings.
    Russia is in a radically different situation than Norway with the fall in oil compounding the challenge of economic stagnation, a collapsing currency and accelerating inflation. For the fifth time this year, the Bank of Russia raised its key rate - it has now raised it by 500 basis points - in an attempt to beat back inflation and shore up the ruble.

    Through the first 50 weeks of this year, the 90 central banks followed by Central Bank News have cut their policy rates 63 times, or 13.5 percent of this year's 467 policy decisions, unchanged from 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 50 times, or 10.7 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.
    The Global Monetary Policy Rate (GMPR) - the average rate of the 90 central banks followed by Central Bank News - was steady at 5.62 percent from the previous week as Russia's 100 basis point rate hike was partly compensated by the rate cuts by Norway and Iceland.
    But the GMPR was still up from 5.54 percent at the end of the third quarter and 5.53 percent at the end of the second quarter and first quarters.

    LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

     

    TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCINEW RATEOLD RATE1 YEAR AGO
    ICELAND 5.25%5.75%6.00%
    NAMIBIA 6.00%6.00%5.50%
    SOUTH KOREAEM2.00%2.00%2.50%
    PHILIPPINESEM4.00%4.00%3.50%
    NEW ZEALANDDM3.50%3.50%2.50%
    INDONESIA 7.75%7.75%7.50%
    NORWAYDM1.25%1.50%1.50%
    SWITZERLANDDM0.25%0.25%0.25%
    RUSSIAEM10.50%9.50%5.50%
    SERBIAFM8.00%8.00%9.50%
    CHILEEM3.00%3.00%4.50%
    PERUEM3.50%3.50%4.00%
    SRI LANKAFM6.50%6.50%6.50%
    MOZAMBIQUE 7.50%7.50%8.25
    UGANDA 11.00%11.00%11.50%

    This week (Week 51) 10 central banks or monetary authorities are scheduled to decide on monetary policy: Sweden, Morocco, Croatia, the Czech Republic, Thailand, the United States, Georgia, Albania, Hungary and Japan.

    TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCIDATECURRENT RATE1 YEAR AGO
    SWEDENDM16-Dec0.00%0.75%
    MOROCCOFM16-Dec2.75%3.00%
    CROATIAFM17-Dec5.00%5.00%
    CZECH REPUBLICEM17-Dec0.05%0.05%
    THAILANDEM17-Dec2.00%2.25%
    UNITED STATESDM17-Dec0.25%0.25%
    GEORGIA 17-Dec4.00%3.75%
    ALBANIA 18-Dec2.25%3.00%
    HUNGARYEM18-Dec2.10%3.00%
    JAPAN 19-DecN/AN/A

    www.CentralBankNews.info

    Dec 15 2:28 AM | Link | Comment!
  • Monetary Policy Week In Review – Nov 10-15, 2014: Serbia, Pakistan Cut Rates As Commodity Prices Drop

    The central banks of Serbia and Pakistan cut their rates last week as the fall in global commodity prices from waning demand is leading to disinflation.
    The drop in commodity prices picked up speed in October with the International Monetary Fund's (NYSE:IMF) index down a sharp 6.42 percent, continuing the decline seen since June.
    Nevertheless, the central banks of Ghana and Ukraine raised their rates last week in response to the continued decline in their currencies that is leading to accelerating inflation.

    Through the first 46 weeks of this year, the 90 central banks followed by Central Bank News have cut their policy rates 57 times, or 13.9 percent of this year's 417 policy decisions, up from 13.5 percent at the end of the third quarter and 12 percent at the end of the first half, and 12 percent at the end of the first quarter.

    Meanwhile, rates have been raised 44 times, or 10.4 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.

    Boosted by Ghana's and Ukraine's large rate rises, the Global Monetary Policy Rate - the average rate of the 90 central banks followed by Central Bank News - rose to 5.60 percent, up from 5.54 percent at the end of the third quarter and 5.53 percent at the end of the second and first quarters.

    LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

     


    TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCINEW RATEOLD RATE1 YEAR AGO
    ARMENIA 6.75%6.75%8.00%
    GHANA 21.00%19.00%16.00%
    UKRAINEFM14.00%12.50%6.50%
    SERBIAFM8.00%8.50%10.00%
    INDONESIAEM7.50%7.50%7.50%
    SOUTH KOREAEM2.00%2.00%2.50%
    PERUEM3.50%3.50%4.00%
    PAKISTANFM9.50%10.00%10.00%

    This week (Week 47) six central banks or monetary authorities are scheduled to decide on monetary policy: Chile, Japan, Georgia, South Africa, Turkey and Zambia.

    TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCIDATECURRENT RATE1 YEAR AGO
    CHILEEM18-Nov3.00%4.50%
    JAPANDM19-NovN/AN/A
    GEORGIA 19-Nov4.00%3.75%
    SOUTH AFRICAEM20-Nov5.75%5.00%
    TURKEYEM20-Nov8.25%4.50%
    ZAMBIA 21-Nov12.00%9.75%

    www.CentralBankNews.info

    Nov 17 1:49 AM | Link | Comment!
  • Monetary Policy Week In Review – Nov 3-7, 2014: ECB Joins Fed, BOE, BOJ In Focusing On Balance Sheet Growth

    The fact that the 24 members of the European Central Bank's (ECB) governing council - including Germany - agree that further unconventional measures should be deployed if necessary to boost inflation, was clearly the main news in global monetary policy last week.
    Whatever differences were behind the ECB's split decision in September to cut rates and purchase asset-backed securities along with covered bonds have now been set aside.
    Although the ECB didn't expand its stimulus measures last week, its president, Mario Draghi, went to great lengths to emphasize to that the ECB's guidance and emphasis on expanding its balance sheet had been "signed by the whole Governing Council unanimously."
    In his prepared statement, Draghi reiterated the guidance from recent months that the council was unanimous in its commitment to using additional unconventional instruments if necessary to address the risk of too prolonged a period of low inflation.
    But Draghi then went one major step further, saying the council had "tasked ECB staff and the relevant Eurosystem committees with ensuring the timely preparation of further measures to be implemented, if needed."
    The implication is clearly that the ECB is preparing markets for further stimulus in December when a likely downward revision in its latest economic forecasts provides it with solid reasons.
    This mirrors the situation in September when the ECB cut its rate to essentially zero at 0.05 percent and embarked on quantitative easing (QE) by purchasing assets.
    In September, ECB staff cut its 2014 growth forecast to 0.9 percent from 1.0 percent and the 2015 forecast to 1.6 percent from 1.7 percent. The forecast for inflation this year was revised downward to 0.6 percent from a June forecast of 0.7 percent while the 2015 forecast was maintained at 1.1 percent.
    Since then, the European Commission has cut its 2014 growth forecast to 0.8 percent and the 2015 forecast to 1.1 percent. Euro area inflation in October was a mere 0.4 percent, well below the ECB's objective of inflation that is just under 2 percent.
    In addition to the reality of the worsening outlook, it seems the ECB council has taken a hard look at how the use of QE has been associated with accelerating growth and rising inflation in the United States and the United Kingdom.
    While the balance sheets of the Federal Reserve and the Bank of England (NYSE:BOE) have tripled or quadrupled in recent years, the ECB's balance sheet has contracted.
    The initial aim of the ECB's current asset purchases is to reverse this trend and boost it by around 1 billion euros so it returns to the level in March 2012 when it was 2.96 trillion euros.
    Next up for the ECB in December is likely to be a more ambitious target for expanding its balance sheet, either by purchasing sovereign bonds, supranational bonds or even corporate bonds, as the Bank of Japan (BOJ) has been doing.
    "The lessons from other countries and other jurisdictions are very important in the sense that they make us think about how to make the most of the measures we may be taking," Draghi said.

    Through the first 45 weeks of this year, the 90 central banks followed by Central Bank News have cut their policy rates 57 times, or 13.7 percent of this year's 417 policy decisions, up from 13.5 percent at the end of the third quarter and 12 percent at the end of the first half, and 12 percent at the end of the first quarter.

    Meanwhile, rates have been raised 42 times, or 10.0 percent of all policy decisions, slightly down from 10.2 percent at the end of September, but up from 9.3 percent at the end of June and 8.7 percent at the end of March.

    Boosted by Malawi's 250 basis point rate rise, the Global Monetary Policy Rate - the average rate of the 90 central banks followed by Central Bank News - rose to 5.57 percent, up from 5.54 percent at the end of the third quarter and 5.53 percent at the end of the second quarter and first quarters.

    LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

     


    LIST OF OTHER STORIES:

     

    TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCINEW RATEOLD RATE1 YEAR AGO
    MALAWI 25.00%22.50%25.00%
    EAST. CARRIB. C.BANK 6.50%6.50%6.50%
    AUSTRALIADM2.50%2.50%2.50%
    ROMANIAFM2.75%3.00%4.00%
    KENYAFM8.50%8.50%8.50%
    THAILANDEM2.00%2.00%2.25%
    ICELAND 5.75%6.00%6.00%
    POLANDEM2.00%2.00%2.50%
    MALAYSIAEM3.25%3.25%3.00%
    UNITED KINGDOMDM0.50%0.50%0.50%
    EURO AREADM0.05%0.05%0.25%
    CZECH REPUBLICEM0.05%0.05%0.05%
    MOZAMBIQUE 7.50%8.25%8.25%

    This week (Week 46) six central banks or monetary authorities are scheduled to decide on monetary policy: Armenia, Croatia, Serbia, Indonesia, South Korea and Peru.

    TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

    COUNTRYMSCIDATECURRENT RATE1 YEAR AGO
    ARMENIA 11-Nov6.75%8.00%
    CROATIAFM12-Nov5.00%5.00%
    SERBIAFM13-Nov8.50%10.00%
    INDONESIAEM13-Nov7.50%7.50%
    SOUTH KOREAEM13-Nov2.00%2.50%
    PERUEM13-Nov3.50%4.00%

    www.CentralBankNews.info

    Nov 10 12:50 AM | Link | Comment!
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