The week ending the 7th of May saw continued emerging market monetary policy tightening, with developed market central banks holding off from further tightening. Of the central banks that made decisions on monetary policy settings this week, those that increased were: India +50bps to 7.25%, Philippines +25bps to 4.50%, and Malaysia +25bps to 3.00%. Meanwhile those that held rates were: Australia 4.75%, Romania 6.25%, United Kingdom 0.50%, European Union 1.25%, and the Czech Republic 0.75%. In terms of other policy tools Malaysia also increased its required reserve ratio +100bps to 3.00%, meanwhile Angola reduced its required reserves by -500 basis points to 20%. Overall there were no major surprises, but India did increase by 50bps where as the market was expecting 25bps.
Next week there are no major central banks scheduled to review policy, however the Bank of Japan will release its recent monetary policy meeting minutes early next week, and the Bank of England will release its inflation report. Elsewhere the following central banks are scheduled to review policy: Poland (11 May) currently 4.00% , Norway (12th May) currently 2.00%, South Africa (12th) currently 5.50%, and South Korea (13th May) currently 3.00%. There is a reasonable chance that most of those banks will increase their monetary policy rates.
Source: www.CentralBankNews.info
Article source: http://www.centralbanknews.info/2011/05/monetary-policy-week-in-review-1-may.html