Wednesday, November 26, 2014

Albania cuts rate another 25 bps to 2.25%

    Albania's central bank cut its policy rate by another 25 basis points to 2.25 percent following a review of the outlook and economic and monetary developments, the bank said in a brief statement.
    The Bank of Albania has now cut its rate by 75 basis points this year.
    Last month the central bank held its rate steady but said it would ease further if the economy deteriorated more than forecast.
    On Tuesday the International Monetary Fund said Albania's economy was expected to growth 2 percent this year with output below potential and inflation expected to remain low. In 2013 Albania's economy expanded by only 0.4 percent when the central bank cut rates by 100 basis points.
   The IMF also said inflation expectations appeared to be well-anchored and monetary policy should continue to be supportive of economic recovery as credit growth remains low, though recovering, due to high non-performing loans weaknesses in contract enforcement.
    Albania's headline inflation rate eased to 1.4 percent in October from 1.5 percent the previous month while Gross Domestic Product expanded by 0.38 percent in the second quarter from the first for annual growth of 1.73 percent, up from a contraction of 1.31 percent in the first quarter.
   
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Central Bank News Link List - Nov 26, 2014 - ECB may consider sovereign QE next quarter, Constancio says

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.



Tuesday, November 25, 2014

Hungary holds rate, loose conditions for extended period

    Hungary's central bank left its base rate steady at 2.10 percent, as expected, and confirmed its guidance that it expects to maintain the current loose monetary conditions "for an extended period."
    The National Bank of Hungary (MNB), which ended a two-year easing cycle in July after cutting its rate by 490 basis points, also repeated that disinflationary pressures from the demand side were gradually weakening as economic activity gathers pace so inflation is likely to reach levels around 3 percent - a level that is consistent with price stability - in the second half of the forecast period.
    Hungary's headline inflation rate was minus 0.4 percent in October, down from minus 0.5 percent in September and the central bank said low inflation was likely to persist for an extend period.

    The National Bank of Hungary issued the following statement:

"At its meeting on 25 November 2014, the Monetary Council reviewed the latest economic and financial developments and voted to leave the central bank base rate unchanged at 2.10%.

Nigeria ups rate 100 bps, CRR 500 bps, lowers FX target

    Nigeria's central bank raised its benchmark Monetary Policy Rate (MPR) by 100 basis points to 13.0 percent, raised the reserve requirement on private sector deposits by 500 basis points to 20.0 percent, and lowered its target for the naira's exchange rate in what it described as a "bold policy" move to maintain exchange rate stability, stem the decline in foreign exchange reserves and anchor inflation expectations.
   It was the first change in rates by the Central Bank of Nigeria (CBN) since October 2011 and comes against the backdrop of a 10 percent drop in official reserves to $36.75 billion at the end of last month as the central bank has fought to stabilize and defend the naira's exchange rate around the previous target midpoint of 155 to the U.S. dollar.
    The central bank today lowered the exchange rate target midpoint to 168 naira a dollar and widened the band by 200 basis points to plus/minus 5 percent from plus/minus 3 percent. The naira was trading at 177.3 to the dollar today, down 11 percent since the start of the year, with the end of the U.S. Federal Reserve's asset purchases encouraging capital outflows.
    "In the Committee's opinion, a more flexible naira in the face of nonexistent fiscal buffers was the most viable policy option at a time of heightened demand pressure for foreign exchange and falling oil prices," Governor Godwin Emefiele said.

Monday, November 24, 2014

Angola holds rate but raises RRR by 250 bps

   Angola's central bank maintained its Basis Interest Rate (BNA) at 9.0 percent but continued to tighten its policy stance by raising the required reserve ratio for local currency deposits by 250 basis points to 15.0 percent.
    The National Bank of Angola (BNA), which has cut its rate by a net 25 basis points this year, noted that consumer price inflation rose by 0.29 percentage points to 7.48 percent in October, with prices of food and nonalcoholic beverages rising by 0.22 percentage points, the largest contributor.
    Credit to Angola's economy rose by an annual 19.14 percent in October to 3.359 billion kwanza and commercial banks purchased foreign exchange worth US$3.103 billion while the kwanza depreciated by an average 1.26 percent in October from the previous month to 99.68 to the dollar.

    The National Bank of Angola issued the following statement: (translation by Google)

"The Monetary Policy Committee of the National Bank of Angola (CPM) met on 24 November, at its thirty-eighth regular session, the eleventh of 2014.
In order to take monetary policy measures that contribute to the maintenance of price stability in the national economy, the evolution of inflation was analyzed, the real economy, fiscal and monetary accounts as well as the latest information on the international economic situation, including the SADC region. The analysis was based on data for the month of October 2014.

Israel maintains rate, recent cuts not yet fully reflected

    Israel's central bank maintained its benchmark interest rate at 0.25 percent and confirmed its guidance from October that the impact of recent rate reductions "have not yet been fully reflected in activity and inflation, and in light of that decided to keep the interest rate unchanged this month as well."
    The Bank of Israel (BOI), which has cut its rate by 75 basis points this year, also repeated its standard phrase that the future rate path depends on inflation, economic growth, the monetary policy of major central banks and the shekel's exchange rate.
    The BOI did not make any reference to the possible use of unconventional monetary policies.
    In the minutes from its October 27 meeting, the BOI said it was assessing the use of additional tools if necessary because the "interest rate too is close to full use."
    Israel's economy has been hit hard by its army's offensive into Gaza in July, known as Operation Protective Edge, with the Gross Domestic Product contracting by 0.9 percent in the third quarter from the second quarter due to a sharp decline in investment and continued drop in exports while private consumption continued to increase, the BOI said.
    But recent economic data - relating to good exports, industrial production, trade, services and indirect tax revenue - point to a recovery in activity "to the moderate growth level of just before the conflict," the BOI added.

This week in monetary policy: Israel, Angola, Hungary, Nigeria, Albania, Fiji, Egypt, Colombia and Trinidad & Tobago

    This week (November 24 through November 28) central banks from nine countries are scheduled to decide on monetary policy: Israel, Angola, Hungary, Nigeria, Albania, Egypt, Fiji, Colombia and Trinidad & Tobago.
    Following table includes name of the country, its MSCI classification, the date the policy decision will be announced, the current policy rate, and the rate one year ago.

COUNTRY MSCI              DATE  CURRENT  RATE         1 YEAR AGO
ISRAEL DM 24-Nov 0.25% 1.00%
ANGOLA 24-Nov 9.00% 9.25%
HUNGARY EM 25-Nov 2.10% 3.20%
NIGERIA FM 25-Nov 12.00% 12.00%
ALBANIA 26-Nov 2.50% 3.25%
EGYPT EM 27-Nov 9.25% 8.75%
FIJI 27-Nov 0.50% 0.50%
COLOMBIA EM 28-Nov 4.50% 3.25%
TRINIDAD AND TOBAGO 28-Nov 3.00% 2.75%

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Sunday, November 23, 2014

Central Bank News Link List - Nov 23, 2014 - China ready to cut rates again on fears of deflation - sources

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Friday, November 21, 2014

Central Bank News Link List - Nov 21, 2014 - China cut reflecting domestic reasons carries global resonance

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China cuts key rate 40 bps, deposit rate by 25 bps

    China's central bank cut its benchmark one-year lending rate by 40 basis points to 5.6 percent, the first rate cut since July 2012, along with the one-year deposit rate that was cut by 25 basis points to 2.75 percent.
    The People's Bank of China (PBOC) said in a statement that the new interest rates would take effect from Saturday, Nov. 22.
    The PBOC also continued the process of liberalizing interest rates, allowing banks to pay depositors up to 1.2 times the benchmark rate, up from 1.1 times.
     In an accompanying statement, the PBOC said the cut in the lending rate was aimed at guiding market rates lower and help reduce loan pricing benchmarks and other financial products.
    Speculation that China's central bank would cut rates has been growing in recent months as its economy continues to slow, especially the manufacturing and housing sector.
    In the third quarter China's Gross Domestic Product (GDP) expanded by 1.9 percent from the second quarter with annual growth rate easing to 7.3 percent, a level not seen since 2009, from 7.5 percent in the second quarter and 7.4 percent in the first quarter.
    China's government's growth target for 2014 is 7.5 percent, the same as in 2013 when the International Monetary Fund (IMF) estimates its GDP grew by 7.7 percent. The IMF estimates 7.4 percent growth this year and 7.1 percent in 2015.
    Last month the central bank injected some 200 billion yuan of three-month loans into its major banks to improve liquidity, a move that prompted talk that the PBOC was getting ready to cut rates.

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Thursday, November 20, 2014

Central Bank News Link List - Nov 20, 2014 - Yellen gets that sinking feeling Greenspan once knew

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.