Sunday, January 10, 2021

This week in monetary policy: Poland, Serbia, Peru and South Korea

   This week - January 11 through January 16 - central banks from 4 countries or jurisdictions are scheduled to decide on monetary policy: Poland, Serbia, Peru and South Korea.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the local time a policy decision is announced, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.
    The table is updated when the latest decisions are announced and can always be accessed by clicking on This Week.

WEEK 2
JAN 11 - JAN 16, 2020:
POLAND13-Jan0.10%001.50%         EM
SERBIA14-Jan1.00%12:00-2502.25%         FM
PERU14-Jan0.25%002.25%         EM
SOUTH KOREA15-Jan0.50%001.25%         EM
 
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Wednesday, January 6, 2021

2021 Global Central Bank Monetary Policy Calendar - adds Sri Lanka & Ghana

     Herewith the second draft of the 2021 calendar of meetings by central bank committees that decide monetary policy, which adds the schedules for the central banks of Sri Lanka and Ghana.
     For Sri Lanka, the previously scheduled meeting on Jan. 21 has been changed to Jan. 19 and for Ghana the previously scheduled announcement with the result of policy meetings on Jan. 25 has been changed to Feb. 1.
     So far Indonesia's central bank has only scheduled January and February meetings for its board of governors.
     The following table includes the date for scheduled monetary policy meetings for more than 70 of the world's central banks. In the event policy meetings take place over multiple days, the date listed below is for the final day when decisions are normally announced.
     Central Bank News will update this calendar in coming weeks as additional central banks announce their meeting schedule for 2021.
     During the year the calendar is regularly updated as some times the previously announced data is changed and in other cases monetary policy committees only announce the date for upcoming meetings a few weeks in advance or following the prior meeting.
     Readers are encouraged to check on the latest version of the calendar here.
     You may replicate the calendar in part or in full only if you link to Central Bank News.

               DATE  FX CODE COUNTRYCENTRAL BANK
        JANUARY 
4-Jan    ILSIsraelBank of Israel
8-Jan    RONRomania 1)National Bank of Romania
13-Jan    PLNPolandNational Bank of Poland
14-Jan    RSDSerbiaNational Bank of Serbia
14-Jan    PENPeruCentral Reserve Bank of Peru
15-Jan    KRWSouth KoreaBank of Korea
19-Jan    LKRSri Lanka Central Bank of Sri Lanka 
20-Jan    CNYChinaPeople's Bank of China 
20-Jan    MYRMalaysiaCentral Bank of Malaysia
20-Jan    CADCanadaBank of Canada
20-Jan    BRLBrazilCentral Bank of Brazil
21-Jan    JPYJapanBank of Japan
21-Jan     IDRIndonesiaBank Indonesia
21-Jan    NOKNorwayNorges Bank
21-Jan    UAH UkraineNational Bank of Ukraine
21-Jan    UZSUzbekistanCentral Bank of the Rep. of Uzbekistan 
21-Jan    EUREuro areaEuropean Central Bank
21-Jan    TRYTurkeyCentral Bank of Republic of Turkey
21-Jan    ZARSouth AfricaSouth African Reserve Bank
25-Jan    KZTKazakhstanNational Bank of Kazakhstan
25-Jan    KGSKyrgyzstanNational Bank of the Kyrgyz Republic
26-Jan    HUFHungaryCentral Bank of Hungary
27-Jan    KESKenya Central Bank of Kenya 
27-Jan    MZNMozambiqueBank of Mozambique
27-Jan    USDUnited StatesFederal Reserve
27-Jan    CLPChileCentral Bank of Chile
28-Jan    AOAAngolaBank of Angola
29-Jan    AZNAzerbaijanCentral Bank of Azerbaijan Republic
29-Jan    MDLMoldovaNational Bank of Moldova
29-Jan    MWKMalawiReserve Bank of Malawi
29-Jan    BGNBulgariaBulgarian National Bank 
29-Jan    COPColombiaCentral Bank of Colombia 

Sunday, January 3, 2021

UPDATE- This week in monetary policy: Israel and Romania (CANCELLED)

    (Following item is updated with the cancellation of the Jan. 8 monetary policy meeting by the National Bank of Romania's board. The Feb. Feb. 9 meeting has also been cancelled.)

    This week - January 4 through January 9 - only the Bank of Israel is scheduled to decide on monetary policy.
    The National Bank of Romania's event calendar had included a board meeting on monetary policy issues on Jan. 8, 2021 but its calendar also continued to include a note from March last year that its board had suspended any previously scheduled meetings due to the elevated uncertainty surrounding economic and financial developments.
     Instead, board meetings to discuss monetary policy would be held "whenever necessary."
     Following table includes the name of the country, the date of the next policy decision, the current policy rate, the local time a policy decision is announced, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.
    The table is updated when the latest decisions are announced and can always be accessed by clicking on This Week.

 

WEEK 1
JAN 4 - JAN 9, 2020:
ISRAEL4-Jan0.10%16:00000.25%         DM

    

www.CentralBankNews.info

2021 Global Central Bank Monetary Policy Calendar

      Herewith the first draft of the 2021 calendar for meetings by central bank committees that decide monetary policy.
     The following table includes the date for scheduled monetary policy meetings for more than 70 of the world's central banks. In the event policy meetings take place over multiple days, the date listed below is for the final day when decisions are normally announced.
     Central Bank News will update this calendar several times in coming weeks as some central banks have yet to announce their meeting schedule for 2021.
     During the year the calendar is regularly updated as some times the previously announced data is changed and in other cases monetary policy committees only announce the date for upcoming meetings a few weeks in advance or following the prior meeting.

     Readers are encouraged to check on the latest version of the calendar here.
     You may replicate the calendar in part or in full only if you link to Central Bank News.
               DATE  FX CODE COUNTRYCENTRAL BANK
        JANUARY 
4-Jan    ILSIsraelBank of Israel
8-Jan    RONRomania 1)National Bank of Romania
13-Jan    PLNPolandNational Bank of Poland
14-Jan    RSDSerbiaNational Bank of Serbia
14-Jan    PENPeruCentral Reserve Bank of Peru
15-Jan    KRWSouth KoreaBank of Korea
20-Jan    CNYChinaPeople's Bank of China 
20-Jan    MYRMalaysiaCentral Bank of Malaysia
20-Jan    CADCanadaBank of Canada
20-Jan    BRLBrazilCentral Bank of Brazil
21-Jan    JPYJapanBank of Japan
21-Jan     IDRIndonesiaBank Indonesia
21-Jan    LKRSri Lanka Central Bank of Sri Lanka 
21-Jan    NOKNorwayNorges Bank
21-Jan    UAH UkraineNational Bank of Ukraine
21-Jan    UZSUzbekistanCentral Bank of the Rep. of Uzbekistan 
21-Jan    EUREuro areaEuropean Central Bank
21-Jan    TRYTurkeyCentral Bank of Republic of Turkey
21-Jan    ZARSouth AfricaSouth African Reserve Bank
25-Jan    KZTKazakhstanNational Bank of Kazakhstan
25-Jan    KGSKyrgyzstanNational Bank of the Kyrgyz Republic
25-Jan    GHSGhanaBank of Ghana
26-Jan    HUFHungaryCentral Bank of Hungary
27-Jan    KESKenya Central Bank of Kenya 
27-Jan    MZNMozambiqueBank of Mozambique
27-Jan    USDUnited StatesFederal Reserve
27-Jan    CLPChileCentral Bank of Chile
28-Jan    AOAAngolaBank of Angola
29-Jan    AZNAzerbaijanCentral Bank of Azerbaijan Republic
29-Jan    MDLMoldovaNational Bank of Moldova
29-Jan    MWKMalawiReserve Bank of Malawi
29-Jan    BGNBulgariaBulgarian National Bank 
29-Jan    COPColombiaCentral Bank of Colombia 
       

Wednesday, December 30, 2020

Dominican Rep. holds rate 4th time, sees 6% growth 2021

     The central bank of the Dominican Republic maintained its key interest rate for the fourth month in a row and while it reiterated inflation temporarily will exceed its target, it also forecast economic growth in 2021 will exceed its potential and output should rise around 6.0 percent.
     The Central Bank of the Dominican Republic (BCRD) left its monetary policy rate at 3.0 percent, unchanged since Aug. 31 when the rate was cut for the second time this year following a cut in March.
     The two cuts this year total 150 basis points and follow three rate cuts in 2019 in July, August and September.
     Since the July rate cut, which was decided on June 30, 2019, the policy rate has been cut by a total of 250 basis points.
     Inflation in the Dominican Republic has been rising for the last six months and rose to 5.26 percent in November, above the central bank's target range of 4.0 percent, plus/minus 1 percentage point.
     BCRD attributed the rise to a rise in food costs due to the delayed impact of the drought at the start of the year, from two storms, and higher cost of imports, freight and transportation costs.
     Looking ahead, the central bank forecast inflation would temporarily top its target range in the first months of 2021 and then converge to the center of its target range.
     BCRC added it still has room to maintain favorable monetary conditions to support economic activity as inflation expectations remain anchored to the midpoint of its inflation target.
     The economy of the Dominican Republic is continuing to recover, with the monthly economic activity index showing minus 3.4 percent in November, sharply up from minus 29.8 seen in April.
     This means the accumulated growth rate in the first 11 months was minus 7.3 percent, the bank said, adding its forecast show that economic activity will continue to strengthen progressively and growth in 2021 could be around 6.0 percent, supported by monetary and fiscal policies.
     The Dominican Republic's gross domestic product shrank an annual 16.9 percent in the second quarter of this year after zero growth in the first quarter.
      Due to the rate cuts, the weighted average lending rate of banks in the Dominican Republic has declined to around 9.8 percent in December from 13.3 percent t in March, private credit in pesos has expanded around 9.0 percent by the end of December while there has also been a positive trend in tax collections and foreign direct investment is projected to reach some US$2.5 billion in 2020, close to the average of the last  decade.
     At the same time, the central bank said international reserves have risen to US$10.62 billion by the end  of 2020, the highest level ever recorded, the equivalent of 13.5 percent of GDP or some 6-1/2 months of imports.



Sunday, December 27, 2020

This week in monetary policy: Trinidad & Tobago, Bulgaria and Dominican Republic

    This week - December 28 through January 2 - central banks from three countries or jurisdictions are scheduled to decide on monetary policy: Trinidad and Tobago, Bulgaria and Dominican Republic.

     Following table includes the name of the country, the date of the next policy decision, the current policy rate, the local time a policy decision is announced, the result of the last policy decision, the change in the policy rate year to date, and the rate one year ago.

    The table is updated when the latest decisions are announced and can always be accessed by clicking on This Week.

 

WEEK 53
DEC 28 - JAN 2, 2021:
TRINIDAD & TOBAGO30-Dec3.50%0-1505.00%
BULGARIA31-Dec0.00%000.00%
DOMINICAN REP.31-Dec3.00%0-1504.50%

 

    www.CentralBankNews.info


Thursday, December 24, 2020

Egypt leaves rates on hold and lowers inflation target

     Egypt's central bank left its key interest rates on hold after cutting them three times this year, most recently in November, saying this decision was consistent with achieving its new and lower inflation target for the end of 2022.
     The Central Bank of Egypt (CBE) kept its overnight deposit rate, the overnight lending rate and the rate on its main operation unchanged at 8.25 percent, 9.25 percent, and 8.75 percent, respectively, along with the discount rate at 8.75 percent.
     CBE has already cut its interest rates three times this year by a total of 400 basis points following cuts in March, September and November. 
     Since February 2018, when CBE began its monetary easing cycle in response to decelerating inflation, the key interest rates have been cut by a total of 10 percentage points.
     Egypt's inflation rate has been trending lower since hitting 33 percent in July 2017 though it has ticked up in recent months to 5.7 percent in November, the third month of acceleration, pushed up by what CBE said was a higher prices on some food items, for example tomatoes.
     But annual core inflation only rose to 4.0 percent in November from 3.9 percent and CBE said headline inflation is increasingly likely to fall below the lower bound of its target range of 6.0 percent.
     The central bank lowered its inflation target to 7.0 percent, plus/minus 2 percentage points, on average during the fourth quarter of 2022, down from its previous target of 9.0 percent, plus/minus 3 percentage points.
     Inflation targets are used by central banks to anchor inflation expectations and CBE noted exogenous shocks outside the scope of monetary policy may lead to transitory deviations of inflation from the target.
     Egypt's economy was hit hard by the Arab Spring in 2011 as it scared off foreign tourists and investors, resulting in a persistent shortage of foreign currency and declining foreign exchange reserves, which then made it increasingly difficult for the central bank to defend the value of the pound.
     A new central bank governor, Tarek Amer, took over CBE in November 2015and quickly began a major overhaul of the bank's policy by devaluing the pound by 12 percent in March 2016 and reforming the foreign exchange market to preserve U.S. dollars and attract funds from abroad.
      Later that year Egypt and the International Monetary Fund (IMF) reached a deal to shore up the government's reform program aimed a boosting economic growth and improving the fiscal situation.
     As part of a $12 billion agreement with the IMF, the pound was floated in November 2016 and immediately lost half of its value, boosting inflation and triggering rate hikes to curb inflation.
     But since December 2016 Egypt's pound has steadily appreciated though it fell sharply in March this year as most other currencies worldwide, during the COVID-19 crises. 
     Today the pound is trading at 15.69 to the dollar, up 2.3 percent since the start of this year.
     As other countries, Egypt's economy was hit by the pandemic and in June the IMF approved a US$5.2 billion loan to help it meet its balance of payment needs and the budget deficit.
      After shrinking by an annual 1.7 percent in the second quarter, Egypt's economy bounced back and expanded by a 0.7 percent in the third quarter, the bank said, adding the unemployment rate had declined to 7.3 percent, the lowest on record, down from 9.6 percent in the second quarter.
     "Most demand side leading indicators for October and November 2020 show continued signs of recovery after displaying weakness during 2020 Q2," CBE said.
     In the last financial year 2019/20, which ended June 30, Egypt's economy slowed to growth of 3.6 percent from 5.6 percent the previous year.

Turkey raises rate 3rd time to eliminate risks to inflation

       Turkey's central bank raised its policy interest rate for the third time this year, and for the second time under its new governor, in what it said was a "strong monetary tightening" to eliminate the risks to the outlook for inflation and reiterated it would "decisively" maintain tight monetary policy until there is a permanent fall in inflation.
      The Central Bank of the Republic of Turkey (CBRT) raised its one-week repo auction rate by another 200 basis points to 17 percent and has now raised it by 825 points following a first hike in September and then a second hike in November after the new governor, Naci Agbal, was installed by Turkey's strong-willed president, Tayyip Erdogan.
     "Domestic demand conditions, cumulative cost effects, in particular the exchange rat effects, increasing international food and other commodity prices and deterioration in inflation expectations continue to affect the pricing behavior and inflation outlook adversely," CBRT's monetary policy committee (MPC) said, adding:
     "Accordingly, the MPC, taking into account the end-2021 forecast target, has decided to implement a strong monetary tightening, in order to eliminate risks to the inflation outlook, contain inflation expectations and restore the disinflation process as soon as possible."
     Agbal, the central bank's fourth governor in five years, took over from Murat Uysal who was fired by Erdogan on Nov. 6. Two days later,  on Nov. 8, Berat Albayrak, Erdogan's son-in-law, resigned as finance minister, in another manifestation of the change in Turkey's economic leadership.
      While CBRT was widely expected to continue tightening its monetary policy following last week's briefing by its governor,  the hike was stronger than most economists had forecast. The average of polls had settled on a 150 basis point hike, within a range of 75 to 200 points.
      The three rate hikes have more than erased the central bank's five rate cuts from January to May, with the one-week repo rate now 5 percentage points above its level at the start of the year and the highest since  September 2019 when the central bank was in the midst of an easing campaign that began in July and continued through the COVID-19 crises at the start of the year until May when it stabilized for a few months at 8.25 percent before the shift in policy in September.
      Despite the three rate hikes, Turkey's inflation rate has continued to accelerate and it jumped to 14.03 percent in November from 11.89 percent in October, almost three times the central bank's medium-term target of 5.0 percent.
      But the rate hike was welcomed by the foreign exchange market with the lira continuing its recent rise from a record low around 8.52 to the U.S. dollar on Nov. 8 when Erdogan's son-in-law resigned. 
      Since then the lira has appreciated xx percent against the dollar to trade at 7.57 today 7.57  7.65
      However, the lira is still down 21.4 percent since the start of the year, one of the biggest losers among emerging market currencies this year along with Argentina's peso, explaining some of the upward pressure on inflation from the rise in import prices.
      The continued rise in the lira indicates that financial markets are still voicing confidence in the change in the direction of Turkey's economic policy following the change in finance minister and governor in November toward a more orthodox policy.
      In addition to the change in governor and finance minister, Erdogan on Nov. 11 pledged a new economic strategy based on stability, lower inflation and international investment. 
      Erdogan's pledge came two days after the bank's new governor, Agbal, in his first public comments on Nov. 9 underscored his commitment to price stability.
      On Dec. 16 Agal confirmed his determination to achieve disinflation, saying he would tighten policy to achieve this and a tight and decisive monetary policy would be maintained in 2021 to reach an interim target of 9.4 percent inflation by the end of 2021 and then 5.0 percent in 2023.
      Agbal also confirmed that CBRT would be following a more normal monetary policy, with the one-week repo rate its main policy tool to signal its stance while the rate corridor and late liquidity window only used for temporary liquidity issues, unlike its move under the previous governor when markets were left confused as the bank on occasions used a range of tools to adjust lending rates.
      Agbal's commitment to stamp out inflation and rebuild foreign exchange reserves - which have declined to a 15-year low - should also help in reducing the level of dollarization in Turkey where many citizens used U.S. dollars to protect their savings.
      In recent years the central bank's policy has zig-zagged with investors questioning its commitment to low inflation - putting downward pressure on the lira - and its independence from political pressure as Erdogan for years has openly called for low interest rates to boost economic growth, arguing high interest rates cause high inflation, an view that is not shared by financial markets or economists.
      In today's statement, the central bank confirmed that a tight monetary policy will be "decisively sustained until strong indicators point to a permanent fall in inflation in line with the targets and to price stability." 
      Turkey's economy has bounced back fast from the hit to activity in the second quarter, with gross domestic product rising 15.6 percent year-on-year in the third quarter after declining 10.8 percent in the second quarter.
      CBRT said a partial recovery of the global economy is continuing in the fourth quarter though uncertainty prevails due to the recent rise in COVID-19 infections just as the vaccine is showing positive developments.
      Nationally, data for the fourth quarter point to a "strong course" in economic activity but new restrictions due to the rising number of virus cases create uncertainty about the outlook in the short run, especially for the services sector.