Monday, March 30, 2015

This week in monetary policy: Kyrgyz Republic, Angola and Romania

   This week (March 30 through April 4) central banks from three countries or jurisdictions are scheduled to decide on monetary policy: The Kyrgyz Republic, Angola and Romania.
    Following table includes the name of the country, its MSCI classification, the direction of the latest decision, the date the new policy decision will be announced, the current policy rate, and the rate one year ago.

MAR 30 -APR 4, 2015
KYRGYZSTAN UNCH. 30-Mar 11.00% 6.00%
ANGOLA UNCH. 30-Mar 9.00% 9.25%
ROMANIA FM CUT 31-Mar 2.25% 3.50%

Saturday, March 28, 2015

2015 Global Central Bank Calendar - updated with Romania and Ghana

    Following is the 2015 calendar for meetings by central bank committees that decide monetary policy.
    The table includes scheduled meetings for around 40 of the world's central banks. In the event that meetings by monetary policy committees take place over several days, the date listed below is for the final day when decisions are normally announced.
    The calendar is updated regularly to reflect the latest information as some central banks have yet to release their meeting schedule for 2015. Other central banks only release tentative schedules and then finalize their calendar as the meeting nears.

    Work is underway to expand the number of central banks covered, including expanding the existing inflation targets table, and global interest rates table. You may replicate the table in part or in full only if you link to this page.

Central Bank News - 2015 Global Central Bank Calendar

3-Mar     AUD Australia Reserve Bank of Australia
4-Mar     BRL Brazil Central Bank of Brazil
4-Mar     CAD Canada Bank of Canada
4-Mar     PLN Poland National Bank of Poland
4-Mar     ALL Albania  Bank of Albania
5-Mar     EUR Euro area European Central Bank
5-Mar     GBP United Kingdom Bank of England
5-Mar     MYR Malaysia Central Bank of Malaysia
11-Mar     THB Thailand Bank of Thailand
12-Mar     KRW Korea Bank of Korea
12-Mar     NZD New Zealand Reserve Bank of New Zealand
12-Mar     PEN Peru Central Reserve Bank of Peru
12-Mar     RSD Serbia National Bank of Serbia
13-Mar     RUB Russia Bank of Russia
17-Mar     JPY Japan Bank of Japan
17-Mar     TRY Turkey Central Bank of Republic of Turkey
17-Mar     IDR Indonesia Bank Indonesia
18-Mar     USD United States Federal Reserve
19-Mar     NOK Norway Norges Bank
18-Mar     ISK Iceland Central Bank of Iceland
19-Mar     CHF Switzerland Swiss National Bank
19-Mar     CLP Chile Central Bank of Chile
23-Mar     ILS Israel Bank of Israel
24-Mar     MAD Morocco Bank of Morocco 
24-Mar     HUF Hungary Central Bank of Hungary
24-Mar     NGN Nigeria Central Bank of Nigeria
25-Mar     GEL Georgia National Bank of Georgia
25-Mar     UAH  Ukraine National Bank of Ukraine
26-Mar     PHP Philippines Central Bank of Philippines
26-Mar     MXN Mexico Banco de Mexico
26-Mar     ZAR South Africa South African Reserve Bank
26-Mar     CZK Czech Republic Czech National Bank
26-Mar     FJD Fiji Reserve Bank of Fiji
26-Mar     MDL Moldova National Bank of Moldova
26-Mar    TWD Taiwan Central Bank of the Rep. of China (Taiwan)
27-Mar     XCD Eastern Caribbean Eastern Caribbean Central Bank
27-Mar     TTD Trinidad and Tobago Central Bank of Trinidad and Tobago
30-Mar     KGS Kyrgyzstan National Bank of the Kyrgyz Republic
30-Mar     AOA Angola Bank of Angola
31-Mar     RON Romania National Bank of Romania

Central Bank News Link List - Mar 28, 2015: Fed’s Yellen sees gradual rate hikes starting this year

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.

Rwanda holds rate to aid economy as inflation subdued

    Rwanda's central bank maintained its key repurchase rate at 6.5 percent, saying it would maintain its current accommodative monetary policy stance "with the objective of continuing to support the financing of the economy by the banking sector, as long as inflationary pressures remain subdued."
    The National Bank of Rwanda (BNR), which cut its rate by 50 basis points last year, said following the quarterly meeting of its Financial Stability and Monetary Policy Committees that the financial sector remains "sound and resilient" with the banking sector's return on assets up to 1.9 percent by end-December 2014 from 1.5 percent end-December 2013.
    After slowing in 2013, Rwanda's economy recovered last year, growing by 7 percent compared with 4.7 percent in 2013.
    "In 2015, the accommodate monetary policy is expected to continue supporting the financing of the economy through the banking sector," the central bank said on March 26.
   Rwanda's headline inflation rate eased to 0.7 percent in February from 1.4 percent in January, said the bank which tracks urban inflation, attributing this to lower international commodity prices and good agriculture.
    But despite this trend, the bank said pressure to the outlook for inflation may come from uncertainties in international commodity prices, food prices and the exchange rate.
    "However, these risks are not expected to drive inflation on the extreme upside," it said.
    The central bank's governor, John Rwangombwa, told journalists that inflation was not expected to exceed 3.5 percent by the end of this year, according to Reuters.
    Rwanda's franc slumped sharply earlier this month, almost hitting 718 to the U.S. dollar, but the central bank said it intervenes to smoothen excessive volatility.
    In 2013 the FRW depreciated by 6.1 percent against the dollar, then by 3.6 percent last year. As of today, the bank said franc has depreciated by 1.87 percent, the bank said. It ended the week at 685 to the dollar. 

Friday, March 27, 2015

Trinidad & Tobago raises rate 25 bps fourth time in a row

    Trinidad and Tobago's central bank raised its benchmark repurchase rate for the fourth consecutive time by 25 basis points to 3.75 percent, citing recent forward guidance by the U.S. Federal Reserve, the potential for higher inflation in the medium term and a relatively positive outlook for economic growth in 2015.
    The Central Bank of Trinidad and Tobago, which has now raised its rate by 100 basis points since September 2014, added that it would continue to absorb excess liquidity to strengthen the impact of higher interests throughout the financial system.
    On March 18 the Fed dropped the word "patient" from its forward guidance but suggested that no rate hikes would occur in April and June. Financial markets now expect the first increase in the Fed funds rate between July and September, the central bank said.
   The normalization of U.S. monetary policy has implications for portfolio capital outflows and demand for foreign exchange in Trinidad and Tobago as returns on U.S. dollar assets remain more attractive than TT dollar assets, the bank said, adding that higher domestic interest rates are necessary to enhance the return on domestic assets to curb portfolio capital movements abroad.
   By mid-March, the TT$-US$ differential on benchmark 10-year Treasuries had narrowed to 64 basis points from 87 points at the end of January.
    Inflation in Trinidad and Tobago slowed for the third consecutive month to just over 6 percent in February from 9 percent in November due to higher food supply, but the central bank cautioned that this slowdown may be short lived as inflation pressures are expected to pick up in the rest of 2015.
    Among the reasons for these pressures are robust consumer credit, close to full capacity in the domestic economy, expansionary fiscal stimulus and further positive momentum in the non-energy sector even as the energy sector was marred by maintenance work.

Thursday, March 26, 2015

Moldova holds rate, still sees inflation above range

    Moldova's central bank maintained its base rate at 13.5 percent, confirming that it still expects the depreciation of the leu currency to increase inflationary pressures, causing inflation to temporarily breach its upper target range of 5.0 percent, plus/minus 1.5 percentage points.
   The National Bank of Moldova, which raised its rate by 500 basis points at an extraordinary board meeting on Feb. 17, added that its policy stance was still affected by weak economic activity in the euro area along with the recession in its main trading partner of Russia, which leads to the risk of lower foreign income that may influence the exchange rate and thus inflation.
   "The escalation of geopolitical tension in the region could result in additional inflationary pressures," the central bank said.
    The leu currency tumbled by 16.5 percent against the U.S. dollar in 2014 and continued to fall until the middle of March. Since then it has appreciated, trading at 4.07 to the dollar today, down 9 percent since the start of the year.
   The annual inflation rate of Moldova - a former Soviet state located between Romania to the west and Ukraine to the north, south and east - jumped to 6.5 percent in February from 4.7 percent in January and December, mainly due to higher food prices. The core inflation rate rose by 3.2 percentage points to 10.2 percent in February, the bank said.
    Moldova's Gross Domestic Product expanded by 4.6 percent in 2014, sharply down from 8.9 percent in 2013 due to a modest contribution from agriculture and the deterioration of economic activity in Russia and the imposition of its embargo.
    The depreciation of the leu helped support growth last year along with the export facilities offered by the European Union that helped offset some of the restrictions imposed by Russia, the bank said.

Mexico maintains rate as risks to growth deteriorate

    Mexico's central bank maintained its benchmark overnight rate at 3.0 percent, as expected, saying the balance of risks to inflation and global economic growth have remained unchanged since January while the balance of risks to the country's economic growth had deteriorated.
    The Bank of Mexico, which cut its rate by 50 basis points in June 2014, said expectations for inflation in 2015 had declined although the effect of the peso's depreciation has been as expected without generating second-order effects. Medium and long-term inflation expectations remain anchored around the central bank's 3.0 percent target.
    Headline inflation in the first half of March eased slightly to 2.97 percent from February's 3.0 percent and the central bank reiterated from its most recently quarterly report that inflation will remain close to 3.0 percent in coming months and end the year slightly below that level. By 2016 headline inflation is also expected to remain close to 3 percent.
     Economic activity in Mexico has been "somewhat weak," the central bank said, noting a slowdown in exports due to slower growth in U.S. manufacturing at the beginning of the year along with slower oil production which has impacted industrial production.

South Africa holds rate, but inflation outlook deteriorates

     South Africa's central bank maintained its benchmark repurchase rate at 5.75 percent, as expected, but said a deteriorating outlook for inflation meant the current scope for pausing before returning to the path of tightening monetary policy had narrowed.
    The South African Reserve Bank (SARB), which raised its rate by 75 basis points in 2014 to curb inflationary pressures, said the respite to the outlook for inflation from lower international oil prices "appears to have been short-livid," but the policy rate had been maintained today given the uncertainties related to the normalization of U.S. monetary policy and the weak state of the economy.
    "The timing of future interest rate increases will be dependent, as before, on a range of domestic and external factors," Lesetja Kganyago, SARB governor said, adding that he would not hesitate to act to maintain the integrity of the inflation target.
    SARB raised its inflation forecast for 2015 to 4.8 percent from a previous 3.8 percent, with a temporary breach of the 3-6 percent target seen in the first quarter of 2016 due to base effects.
    In the first quarter of 2016 inflation is seen hitting 6.7 percent, but then averaging 5.9 percent for the year, up from the previous forecast of 5.4 percent.
    "The rand exchange rate continues to be the main upside risk to the inflation outlook," Kganyago said, noting the extent to which higher U.S. interest rates are priced into the current exchange rate remains uncertain.
    Since the previous meeting by the central bank's policy committee in November last year, the rand has depreciated about 2 percent against the dollar, but since mid-March the rand has firmed. Today it was trading at 11.9 to the dollar, down 2.8 percent since the start of the year.
    South Africa's consumer price inflation rate eased to 3.9 percent in February from 4.4 percent in January.

Czech maintain rate, FX commitment, as expected

    The Czech National Bank (CNB) maintained its benchmark two-week repo rate at 0.05 percent and reiterated its commitment to intervene in foreign exchange market to keep the koruna currency below 27 to the euro, a decision that was largely expected.
    The central bank for the Czech Republic,  which has been using the exchange rate as an additional tool to ease monetary conditions since November 2013, has seen the koruna firm since mid-January with financial markets seen testing the bank's resolve to maintain its exchange rate cap.
    Last week the koruna hit 27.16 to the euro, the strongest level since November 2013, but since then it has eased slightly to trade around 27.4, still slightly firmer than 27.70 at the start of the year.
    The central bank has on several occasions extended the time frame for maintaining its cap on the koruna's exchange rate, with the cap currently in place until at least the second half of 2016.
    In its February inflation report, the CNB said it expects inflation to be zero or slightly negative this year before rising to its 2.0 percent target in 2016.
    Consumer price inflation was steady at 0.1 percent in February for the third month in a row.

Fiji maintains rate, sees robust economy in 2015

     Fiji's central bank maintained its Overnight Policy Rate (OPR) at 0.5 percent, saying economic activity is robust - resulting in buoyant credit growth, higher consumption and investment activity - and this trend should persist in 2015.
    The Reserve Bank of Fiji (RBF), which has held its rate steady since November 2011, said this positive economic trend had put some pressure on the balance of payments situation through a larger trade deficit, but stronger tourism and remittance receipts had countered this impact.
    RBF Governor Barry Whiteside noted in his statement that Fiji's reserves had eased slightly to $1.778 billion as of March 25 from $1.806.3 billion as of Feb. 24.
    In its economic statement for February, the RBF forecast that consumption and investment this year would expand in line with the 4.0 percent growth forecast from last year, with new lending for investment purposes more than doubling to $43.1 million in January.
    Fiji's inflation rate rose to 2.1 percent in February from 0.3 percent in January but is expected to remain stable this year given the soft global commodity prices and low inflation in trading partners.

Philippines maintains rate, sees manageable inflation

    The Philippine central bank maintained its key policy rates, including the benchmark overnight borrowing rate at 4.0 percent, as widely expected, saying it considers the inflation environment to be "manageable" and inflation expectations remain within the bank's target band.
   The Bangkok Sentral ng Pilipinas (BSP), which raised its rate by 50 basis points last year to curb inflation expectations, said the latest forecasts see inflation settling within the lower half of its target range of 3.0 percent, plus/minus one percentage point, this year and in 2016.
    Risks to the inflation outlook continue to be broadly balanced, with upside risks from expected rises in utility rates and possible power shortages while the uneven pace of global economic activity will mitigate upward pressure on commodity prices.
    Domestic demand in the Philippines remains robust due to solid private demand, adequate liquidity and buoyant business sentiment while public spending is higher.
    Consumer price inflation rate rose slightly to 2.5 percent in February from 2.4 percent in January while Gross Domestic Product in the fourth quarter rose by 2.5 percent from the third quarter for annual growth of 6.9 percent, up from 5.3 percent.
    Earlier this week Amando Tetangco, BSP governor, said the government's 2015 growth target f 7-8 percent was attainable while inflation should remain within the 2-4 percent range. In 2014 the Philippine economy expanded by 6.1 percent, slightly below the government's 6.5-7.5 percent target.