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Monetary Policy Week in Review - 13 November 2010

This week the central banks of Serbia, Peru, Malaysia, and Turkey announced their interest rate decisions. But the main surprise was from China with the People's Bank of China raising the required reserve ratio for banks by 50bps in response to rapid loan growth and rising inflation. Turkey also raised its required reserve ratio 50bps and dropped the rate on its overnight deposits by 400bps to discourage hot capital inflows. The only bank to adjust its main policy rate was the National Bank of Serbia, which raised its rate 100bps to 10.50% from 9.50% due to rising inflationary pressure and faster than expected recovery in aggregate demand.


So not a huge amount of activity over the past week, but with the China move it was hardly quiet on the monetary policy front. Indeed the move has spurred speculation that China may raise its key monetary policy rate before the year is out. There are no major central bank meetings scheduled for next week.

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www.CentralBankNews.info

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