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  • 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!
  • Indonesian Central Bank Holds Reference Rate at 6.75%
    Indonesia's central bank, Bank Indonesia, kept the BI reference rate on hold at 6.75%.  The Bank said: "Bank Indonesia views that the current BI rate level is still consistent with efforts to maintain macroeconomic and financial stability as well as to support stronger economic growth. Bank Indonesia is confident that the impact of the recent turmoil in the global financial markets because of the U.S. credit rating downgrade to the domestic financial market is limited, and can be contained with continuous monitoring of market development and coordination with the government".

    At its July meeting, the Bank also maintained the key monetary policy rate (the BI Rate) unchanged at 6.75%.  Previously the Bank raised the BI rate by 25 basis points to the current 6.75% in February 2011.  Indonesia reported annual inflation of 5.98% in May, compared to 6.16% in April, and 
    6.65% in March, and just inside the inflation target of 5% +/-1% in 2011 (which changes to 4.5% +/-1% in 2012).  Bank Indonesia is forecasting GDP growth of 6.3-6.8% in 2011 and 6.4-6.9% in 2012 for the Indonesian economy, meanwhile Indonesia reported economic growth of 6.5% in the June quarter this year.

    Aug 09 5:45 AM | Link | Comment!
  • Rwanda Central Bank Holds Repo Rate at 6.00%
     The National Bank of Rwanda held its key repo rate unchanged at 6.00%.  Bank Governor, Claver Gatete, said: "Considering current developments and outlook in economic fundamental, central bank monetary policy will remain accommodative to sustain lending to the economy consistent with the growth objective in 2011,".  The IMF previously noted that it is forecasting inflation of 7.5% for 2011 and cautioned the East African nation to tighten monetary policy in order to avoid second-round inflation effects of higher food and energy prices. 

    At its April meeting the Bank also held the key monetary policy 
    interest rate unchanged at 6.00%, meanwhile the bank last reduced the interest rate 100bps to 6.00% in November last year.  Rwanda has seen inflation pick up to 5.82% in June, compared to 4.54% in May, 4.98% in April, and 4.11% in March, and 1.09% in January this year.  According to IMF data Rwanda saw annual GDP growth of 5.39% during 2010, meanwhile the IMF recently scaled down its growth estimate for Rwanda to 7% for 2011, from a previous forecast of 7.5%.  

    Aug 09 5:43 AM | Link | Comment!
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