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  • Norges Bank Keeps Interest Rate at 2.25%
    Norway's central bank, Norges Bank, maintained its key policy rate at 2.25%, and signaled further rate increases.  The Norges Bank Governor, Øystein Olsen, said: "The decision must especially be seen against the background of the recent flare-up in financial market turbulence and clear signs of weaker growth internationally,"... and "An overall assessment of the outlook and the balance of risk suggests that the key policy rate be left unchanged at this meeting,".

    At its previous meeting the Bank held the interest rate unchanged, after increasing the interest rate by 25 basis points to 2.25% in March.  The Bank expects inflation to remain relatively low, but to progress towards the 2.5 percent inflation target (but with due upside inflation risks); Norway reported annual inflation of 1.6% in July, up from 1.3% in June, 1.6% in May, and 1.3% in April this year.  Core inflation in July was 1.2%.
    Aug 10 2:57 PM | Link | Comment!
  • Qatar Central Bank Cuts Deposit Rate 25bps to 0.75%
    The Qatar Central Bank reduced its main overnight deposit facility interest rate by 25 basis points to 0.75%% from 1.00% in order to boost the non-oil sector and regulate capital flows.  The Bank also reduced the overnight lending facility interest rate by 50 basis points to 4.50% from 5.00%, and cut the repo rate by 50 basis points to 4.50% from 5.00%.  The Qatari economy is expected to grow at a rate in excess of 15% this year due to increased gas output, high oil prices, and a 19% increase in government spending.

    Previously the Qatari central bank reduced its interest rates in April this year for similar reasons; dropping the overnight deposit facility rate by 50bps to 1.00%, the overnight lending facility rate by 50bps to 5.00% and the repo rate by 55bps to 5.00%.  Qatar reported annual GDP growth of 22.7% in the March quarter this year, compared to 28.7% in the December quarter last year.  Qatar's consumer price inflation rate was 1.7% in May, up from 1.5% in April.
    Aug 10 2:56 PM | Link | Comment!
  • Swiss National Bank Takes Further Measures Against Currency
    The Swiss National Bank (SNB) announced a further set of measures to halt a surging Swiss franc (CHF) as safe haven buying has driven a substantial rise.  The SNB said it would "significantly increase the supply of liquidity to the Swiss franc money market" and aims to "rapidly expand banks' sight deposits at the SNB from CHF 80 billion to CHF 120 billion.  The SNB will also conduct foreign exchange swap transactions, a measure that was last used in 2008.  The Bank kept the line that it is closely monitoring the market and will take further measures if necessary.

    On the currency, the Bank noted: "The substantial rise in risk aversion on the international financial markets has further intensified the overvaluation of the Swiss franc in the last few days. In the light of these developments, the Swiss National Bank (SNB) is taking additional measures against the strength of the Swiss franc."  The SNB also said: "The massive overvaluation of the Swiss franc poses a threat to the development of the economy in Switzerland and has further increased the downside risks to price stability."

    At its most recent monetary policy meeting in June this year the Swiss National Bank maintained its main interest rate at 0.25%.  The Bank is forecasting inflation of 0.9% during 2011, while 2012 inflation is expected at 1% and 1.7% in 2013.  The CHF last traded around 0.72 against the USD, with the USDCHF exchange rate briefly touching 0.7190.  The SNB announced a series of moves last week aimed at limiting gains in the CHF.
    Aug 10 4:58 AM | Link | Comment!
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