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  • Monetary Policy Week In Review - 25 February 2012
    The past week in monetary policy saw two central banks changing their main interest rates; Colombia +25bps to 5.25%, and Belarus -500bps to 38.00%, while two held their rates unchanged; Namibia at 6.00%, and Turkey at 5.75%. Turkey did however cut some of its other interest rates (see the update for details). Also making headlines was the People's Bank ofChina announcing a 50 basis point cut to the Required Reserve Ratio, an important move towards more growth focused policy settings.

    Looking at the central bank calendar, the week ahead features a handful of emerging/frontier market central bank meetings; with decisions due from Israel, Hungary, and the Philippines. The main event of the next week in central banking though will be the European Central Bank's second LTRO. Also of note is US Federal Reserve Chairman, Ben Bernanke, testifying before the House and Senate on Thursday and Friday.


    • ILS - Israel (Bank of Israel) expected to hold at 2.75%% on the 27th of Feb
    • HUF - Hungary (Magyar Nemzeti Bank) expected to hold at 7.00% on the 28th of Feb
    • PHP - Philippines (Bangko Sentral ng Pilipinas) expected to hold at 4.25%% on the 1st of March

    Also during the past week Central Bank News released data, extending back to January 2000, for the Global Monetary Policy Rate Index - Emerging Markets.


    Article source:

    Feb 24 3:23 PM | Link | Comment!
  • Monetary Policy Week In Review - 18 February 2012
    The past week in monetary policy saw 3 monetary policy interest rate changes; Kazakhstan -50bps to 7.00%, Sweden -25bps to 1.50%, and Ghana +100bps to 13.50%. Meanwhile the central banks of Pakistan 12.00%, Japan 0.10%, Chile 5.00%, and Georgia 6.50% all held interest rates unchanged. The other key headline was the Bank of Japan expanding its quantitative easing program by another 10 trillion Yen to 65 trillion. The Reserve Bank of India also made a technical adjustment to one of its old policy rates.

    Following are some of the key quotes and comments from the central bankers that met to review monetary policy settings over the past week:

    • Bank of Japan (held rate at 0.10%, added to 10T to APP): "Japan's economic activity has been more or less flat, mainly due to the effects of a slowdown in overseas economies and the appreciation of the yen. On the other hand, financial conditions in Japan have continued to ease. On the price front, the year-on-year rate of change in the CPI (all items less fresh food) is around 0 percent."
    • Sweden's Riksbank (cut rate -25bps to 1.50%): "Inflationary pressures in the Swedish economy are low. The economic outlook in Sweden has weakened as a result of developments abroad. In order to stabilise inflation around 2 per cent and resource utilisation in the economy around a normal level, the Executive Board of the Riksbank has decided to cut the repo rate by 0.25 percentage points to 1.50 per cent. The repo rate is expected to remain at this level until some time in 2013."
    • Bank of Ghana (hiked rate 100bps to 13.50%): "The Committee concluded that the balance of risks to inflation is elevated. To contain future inflation pressures and realign interest rates in favour of domestic assets, it is necessary that monetary policy continues to be fine tuned to ensure that inflation expectations remain anchored to keep inflation within the target band."
    • Banco Central de Chile (held rate at 5.00%): "Domestically, economic activity and domestic demand have tended to outperform forecasts from the latest Monetary Policy Report. The labor market is still tight. Credit market conditions are stable. Y‐o‐y CPI inflation is slightly above the tolerance range, while core inflation measures have normalized. Inflation expectations remain around the target."
    • National Bank of Georgia (held rate at 6.50%): "Despite low inflation the real exchange rate had been appreciating in the end of last year. This is related to the faster nominal appreciation of the national currency vs. currencies of main trade partners. Real appreciation on one hand causes further widening of the trade deficit and on the other causes weakening of the demand."
    Looking at the central bank calendar, the only major central bank scheduled to meet next week is the Central Bank of Turkey. Elsewhere the Bank of England will release its recent monetary policy meeting minutes (where it increased its APP by GBP 75B) on Wednesday; likewise the Reserve Bank of Australia will release its most recent monetary policy meeting minutes on Tuesday.


    • TRY - Turkey (Central Bank of Turkey) expected to hold at % on the 21st of Feb

    Also during the past week Central Bank News released data, extending back to January 1999, for the Global Monetary Policy Rate Index - Developed Markets.


    Article source:

    Feb 17 4:03 PM | Link | Comment!
  • Monetary Policy Week In Review - 11 February 2012
    The past week in monetary policy saw just one bank lift rates; Jordan +50bps to 5.00%, and two banks cut rates; Belarus -200bps to 43.00%, and Indonesia -25bps to 5.75%. Meanwhile the banks that held rates unchanged were: Australia 4.25%, UK 0.50%, EU 1.00%, South Korea 3.25%, Serbia 9.50%, Iceland 4.75%, Poland 4.50%, and Peru 4.25%. Also making news was the Bank of England adding another GBP 50 billion to its quantitative easing program.

    Some of the key quotes and comments from the central bankers that announced monetary policy decisions are listed below:


    • Reserve Bank of Australia (held rate at 4.25%): "At today's meeting, the Board noted that interest rates for borrowers have declined to be close to their medium-term average, as a result of the actions at the Board's previous two meetings. With growth expected to be close to trend and inflation close to target, the Board judged that the setting of monetary policy was appropriate for the moment. Should demand conditions weaken materially, the inflation outlook would provide scope for easier monetary policy."
    • Bank Indonesia (dropped rate 25bps to 5.75%): "This decision was made as a further step to boost Indonesia's economic growth amidst decreasing performance of the global economy, with the priority remains on achieving inflation target and exchange rate stability."
    • Bank of England (held rate at 0.50%, added 50B to APP): "In the light of its most recent economic projections, the Committee judged that the weak near-term growth outlook and associated downward pressure from economic slack meant that, without further monetary stimulus, it was more likely than not that inflation would undershoot the 2% target in the medium term."
    • European Central Bank (held rate at 1.00%): "Inflation is likely to stay above 2% for several months to come, before declining to below 2%. Available survey indicators confirm some tentative signs of a stabilisation in economic activity at a low level around the turn of the year, but the economic outlook remains subject to high uncertainty and downside risks.... A very thorough analysis of all incoming data and developments over the period ahead is warranted."
    • Bank of Korea (held rate at 3.25%): "In Korea, economic growth has slowed, with domestic demand subdued overall and exports also decreasing. On the employment front, however, the uptrend in the number of persons employed is being sustained, led by the private sector. The Committee anticipates that the domestic economic growth rate will gradually return to its long-term trend level going forward, although viewing downside risks as likely to remain high for some time due mostly to the impact of external risk factors."
    • Central Reserve Bank of Peru (held rate at 4.25%): "Some current and advanced indicators of activity show a moderation of growth in the economy. For example, even though sales of electricity continued to grow in January, they showed a lower pace of growth than in December. Moreover, indicators of global economic activity have shown a better-than-expected evolution, but uncertainty in international financial markets persists and growth in 2012 is expected to be lower than in the previous year."
    • National Bank of Serbia (held rate at 9.50%): "The key risks to inflation projection stem from the international environment due to the still unresolved crisis in the euro area, as well as from fiscal policy at home. Keeping the budget deficit within the framework earlier agreed with the IMF would serve as an additional safeguard of macroeconomic stability and leave more scope for future relaxation of monetary policy."

    Looking at the central bank calendar, the two main monetary policy meetings are the Bank of Japan and Sweden's central bank. Elsewhere the US Federal Reserve will release the minutes from its most recent FOMC meeting (Wednesday), and the European Central Bank will release its monthly bulletin (Thursday), and the Bank of England is scheduled to release its inflation report (Wednesday).


    • JPY - Japan (Bank of Japan) expected to hold at 0.10% on the 14th of Feb
    • SEK - Sweden (Riksbank) expected to hold at 1.75% on the 15th of Feb


    Article source:

    Feb 10 4:03 PM | Link | Comment!
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