Denmark raises rate 15 bps, ends period of negative rates

   Denmark's central bank raised its rate on certificates of deposits by 15 basis points to 0.05 percent, ending its experiment with negative rates since July 2012.
   Danmark's Nationalbank added that its other rates, the lending rate, the discount rate and the current account rate were unchanged at 0.20 percent, 0.0 percent and 0.0 percent, respectively.
    The rate rise follows the central bank's sale of foreign exchange to manage the krone's exchange rate to the euro. Unlike most central banks in advanced economies, the main objective of the Danish central bank is to defend the targeted rate of the krone to the euro of 7.46038 within a tolerance band of 2.25 percent on either side.
    "The short term rates in the euro area which are higher than the equivalent Danish rates have increased. This increase has tended to weaken the Danish krone," the central bank said.
    In addition, the central bank also reduced the current account ceiling of banks and other monetary counterparts to 38.5 billion crowns from 67.4 billion.
   
  

Central Bank News Link List - Apr 24, 2014 - Weaker inflation could prompt ECB asset-buying: Draghi

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.

• Weaker inflation could prompt ECB asset-buying: Draghi (Reuters)
• Poloz says Canada interest rates to stay low after recovery (Bloomberg)
• ECB Coene: Should move main refi, deposit rate in tandem (MNI)
• Ukraine central bank sees no need for FX intervention (Reuters)
• South Africa’s central bank warns of capital flight risk (WSJ)
• Kenya to adopt inflation targeting to sharpen monetary policy (Reuters)
• Draghi: Eco data frequency may justify fewer ECB meetings (MNI)
• Danthine says SNB can’t use rates now to cool real estate market (Bloomberg)
• Peru central bank president irked by finance minister’s jabs (Reuters)
• Hungary central bank seeks to force banks into forint gov’t debt (Reuters)
• Tools other than deposit reserves ready when, if required-BSP (Business Mirror)
• BOE’s Haldane backs broader economics (WSJ)
• Somalia cabinet approves central bank governor and deputy (Midnimo)
• Krugman target of indignation as Swedes reject Japan comment (Bloomberg)

         www.CentralBankNews.info

Global bank lending shrinks for 7th quarter in a row - BIS

    Global bank lending shrank for the seventh consecutive quarter in the final three months of 2013 as euro-denominated credit continued to fall, boosting the total decline in international credit to $2.3 trillion, or 7.7 percent, since the end of March 2012, according to the Bank for International Settlements (BIS).
    But while total cross-border lending fell by $93 billion, Swiss-based BIS said the 0.3 percent contraction from end-September to end-December was considerably smaller than in the previous two quarters when the decline averaged $519 billion, or 1.8 percent.
    The worldwide lending pattern in the fourth quarter showed a further decline in euro-denominated while loans extended in U.S. dollars and yen rose, said BIS, known as the central banks' bank.
    Euro lending fell by $325 billion, or 3.3 percent, while dollar-lending grew by $49 billion, or 0.4 percent, and yen-lending rose by $62 billion, or 5.3 percent.
    The sharp fall in euro-denominated lending is part of the broader global trend that has been seen since the global financial crises.
    The outstanding stock of euro-denominated claims, including intra-euro lending, has shrunk by $1.8 trillion, or 21 percent, since peaking at $8.8 trillion at the end of 2008. This fall accounts for nearly two-thirds of the overall fall in the stock of global cross-border in the same period.

Turkey holds repo rate but trims late liquidity rate 150 bps

    Turkey's central bank maintained its benchmark one-week repo rate at 10.0 percent but cut the lending rate at its late liquidity window by 150 basis points to 13.5 percent, saying the "recent decline in uncertainties and partial improvement in the risk premium indicators have reduced the need for an additional tightening in liquidity policy."
    The Central Bank of the Republic of Turkey (CBRT), which raised its repo rate by a sharp 550 basis points on Jan. 28 in response to a sharp fall in the lira currency, said its "strong and front loaded monetary tightening" had helped contain the adverse impact on inflation expectations.
    "Inflation expectations and pricing behavior will be closely monitored and the tight monetary policy stance will be maintained until there is a significant improvement in the inflation outlook," the bank said, repeating its guidance from February when rates were held steady.
    In addition to raising the repo rate to its current level of 10.0 percent, the CBRT in January also shifted its overnight interest rate corridor upwards by raising the marginal funding rate, or the ceiling in the corridor, to 12.0 percent from 7.75 percent, and the borrowing rate, or the floor in the corridor to 8.0 percent from 3.5 percent.

New Zealand raises rate another 25 bps to 3.0%

    New Zealand's central bank raised its benchmark Official Cash Rate by another 25 basis points to 3.0  percent, as widely expected, saying it is important to contain rising inflationary pressures.
    But the Reserve Bank of New Zealand (RBNZ), which last month became the first central bank in the world's advanced economies to raise its rate since July 2011, tweaked its guidance from March to specifically take account of the impact of the high exchange rate of the New Zealand dollar on inflation.
    "The speed and extent to which the OCR will be raised will depend on economic data and our ongoing assessment of emerging inflationary pressure, including the extent to which the high exchange rate leads to lower inflationary pressure," RBNZ Governor Graeme Wheeler said in a statement.
     On March 13, when the central bank raised its rate by 25 basis points, the first change in rates since a cut in March 2011, the RBNZ only said the pace of future rate increases would depend on inflationary pressures, omitting any reference to the exchange rate.
     New Zealand's headline inflation rate eased to 1.5 percent in the first quarter of 2014 from 1.6 percent in the fourth quarter of last year, but Wheeler said that "headline inflation is moderate, but inflationary pressures are increasing and are expected to continue doing so over the next two years."

Central Bank News Link List - Apr 23, 2014 - BOE voted 9-0 to keep rates at record low, QE unchanged

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.

• BOE voted 9-0 to keep rates at record low, QE unchanged (MarketWatch)
• Australia's slowing inflation restrains rate-rise bets (Bloomberg)
• BOJ says 90% of banks taking on more risk post-QE (Reuters)
• Brazil analysts: Cen bank won’t react to worsening infl forecast (MNI)
• Ukraine joins euro woes to raise Estonia risk, central bank says (Bloomberg)
• Kuroda says Bank of Japan won’t take on debt-servicing role (Bloomberg)
• Chile central bank signals more rate cuts possible (WSJ)
• Mauritius may need to tighten monetary policy – IMF (Reuters)
• Continued easing would exacerbate Hungary risks:rate-setter (Portfolio.hu)
• Hungary central bank sues board member for slander (politics.hu)
• Former head of U.S. Fed says economy on path to recovery (Canadian Press)
• Peru central bank cuts 2014 GDP forecast to 5.5% on weak mining (Reuters)
• Krugman slamming Riksbank fuels deflation anxiety (Bloomberg)
• Settlement time for U.S. trades closer to being shortened (Reuters)
• Central bank portfolio managers fear rising rates (Financial News)
• Former head of U.S. Fed says economy on path to recovery (Canadian Press)
• Nigeria is at political, economic risks – IMF (Leadership.ng)
• Citi forecast rejected by Costa Rica central bank nominee (Bloomberg)
• Cheers and challenges for Raghuram Rajan (Live Mint)

          www.CentralBankNews.info

Thailand holds rate, to ensure stance supports growth

    Thailand's central bank maintained its policy rate at 2.0 percent but said economic growth in the first quarter is expected to contract by more than previously expected and it would "closely monitor economic and financial developments, and ensure that the monetary policy stance continues to lend sufficient support to the economy."
    The easing bias by the Bank of Thailand (BOT) follows a 25 basis point cut in March and one of the members of the bank's monetary policy committee voted to lower the policy rate by another 25 points. But six members of the committee voted to maintain rates.
    "The Committee deems prolonged political uncertainties to be the main cause for higher downside risks to growth. Financial conditions are accommodative, and are not hindering domestic spending," the BOT said.
    In March the central bank said that it had still scope to ease, but omitted that statement today.
    As expected, the bank said growth this year is expected to be lower than forecast and mainly driven by exports while inflationary pressures rose in line with expectations.
    On Sunday, BOT Governor Prasern Trairatvorakul was quoted as saying the central bank would likely lower its 2.7 percent growth forecast in June due to the sluggish economy and the impact of budget problems caused by the dissolution of the Thai parliament.

Botswana holds rate, inflation seen in 3-6% target range

    Botswana's central bank maintained its bank rate at 7.5 percent, saying the economic outlook and inflation forecast is consistent with keeping inflation in the bank's 3-6 percent medium-term objective.
    The Bank of Botswana, which cut its rate by 200 basis points in 2013 as inflation declined, said moderate domestic demand and expected benign external prices contribute to the positive inflation outlook though this could be affected by unanticipated large increases in administered prices and government levies as well as international food and oil prices beyond the current forecast.
    Botswana's inflation rate eased to 4.4 percent in March from 4.6 percent in February, with the trimmed mean measure of core inflation down to 4.0 percent from 4.1 percent and inflation excluding administered prices down to 5.2 percent from 5.5 percent.
    Botswana's headline inflation rate fell to 5.8 percent in 2013 from 7.5 percent in 2012 and the central bank expects inflation to remain within its 3-6 percent range this year.
    The bank said in February this would give it scope to support economic activity through the current accommodative policy stance.
    The International Monetary Fund has forecast 3.8 percent inflation this year and 3.4 percent in 2015.

Central Bank News Link List - Apr 22, 2014 - ECB Coeure: Still room to lower key rates: press

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.

• ECB Coeure: Still room to lower key rates: press (MNI)
• Turkish central bank may keep rates on hold, ease reserves rules (Reuters)
• Dollar and dairy prices due to alter Reserve Bank’s OCR track (Reuters)
• China details cut in rural banks’ reserve requirements (WSJ)
• Draghi gauges Ukraine effect as ECB tackles low inflation (Bloomberg)
• Gov’t frustration ‘risks central bank’s independence’ (Sydney Morning Herald)
• Philippine two-year bonds drop on interest-rate speculation (Bloomberg)
• Slovak banking industry can withstand crises, central bank says (Bloomberg)
• Swedish lesson show even deflation cannot cure the house price bubble (Telegraph)
• Bank Indonesia shifts focus to supply-side of inflation (Jakarta Post)
• U.S. labor force dropouts want back in: Saft (Reuters)
• International policy cooperation: No ‘effective’ advocate (Live Mint)
• Dominican public debt tops 26.2% of GDP: central bank (Dominican Today)
• Oman expects 5% growth in 2014 - central bank (Reuters)

          www.CentralBankNews.info

Sri Lanka maintains rates, poised for strong performance

    Sri Lanka's central bank maintained its monetary policy stance, as expected, and said the country's economy was poised for a stronger performance on the back of a recovery in the external sector, sustained momentum in construction and manufacturing, and low and stable inflation.
    The Central Bank of Sri Lanka kept its Standing Deposit Facility Rate (SDFR) at 6.50 percent and the Standing Lending Facility Rate (SLFR) at 8.0 percent. The central bank rejigged its policy framework in January with the SDRF rate replacing the previous benchmark repo rate.
    Sri Lanka's headline inflation rate was steady at 4.2 percent in March and February and the central bank expects inflation to remain in mid-single digits throughout the year although there might be some price pressures from supply disruptions linked to drought.
    The central bank targets inflation of 4-6 percent this year and 3-5 percent in 2015 and 2016. In 2013 the central bank cut the benchmark rate by 100 basis points to boost economic growth, which rose to 7.3 percent in 2013 from 6.3 percent in 2012.

Central Bank News Link List - Apr 21, 2014 - BOJ may still opt for huge JGB buys, when it acts - Suda

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.

• BOJ may still opt for huge JGB buys, when it acts-Suda (Reuters)
• POLL-Sri Lanka seen keeping key rates at multi-year lows (Reuters)
• Thai central bank to re-estimate 2014 growth after slowdown (NNT)
• Thai MPC likely to leave rate unchanged, say experts (The Nation)
• New Zealand rate escalator may slow down (Fairfax)
• Turkish central bank may keep rates on hold (Reuters)
• Bank of Russia seen holding rates unchanged Friday (Dow Jones)
• What Putin is costing Russia (WSJ opinion)
• Analysts hope for upswing in Mexico econ activity (MNI)
• Jobless rate still good gauge of slack: Fed study (Reuters)
• Indonesia’s inflation seen slowing in April: Central Bank (Reuters)
• President appoints Azeema as new MMA governor (Haveeru)
• China says to help Qatar central bank buy Chinese bonds (Reuters)
• Kuwait central bank warns against rising gov't spending (Reuters)
• World Cup to kick up prices in inflation-weary Brazil (Reuters)
• India's central bank chief regains power with reserves (Bloomberg)
• German fin watchdog-low rates could trouble bigger insurers (Reuters)
• Iran central bank head says rial drop belied by positive signs (Bloomberg)
• IMF not satisfied with bill on ‘SBP autonomy’ (Dawn.com)
• Nigeria’s Alade: Taking giant strides in men’s world (Nigerian Tribune)
• CBN gets tough on bank, BDCs over round tripping (The Sun)
• Time to change central bank role (The Guardian)
• The systemic risk of hedge funds (WSJ commentary)

          www.CentralBankNews.info