Central Bank News Link List - July 24, 2014 - IMF cuts global growth outlook, warns of stagnation risk

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.

• IMF cuts global growth outlook, warns of stagnation risk in rich nations (Reuters)
• Brazil signals rate unlikely to fall as prices persist (Bloomberg)
• Turkish central bank leaves inflation forecasts unchanged (Reuters)
• Russia seen holding rates as sanctions constrain policy (Bloomberg)
• Greenspan says bubbles can’t be stopped without ‘crunch’ (MarketWatch)
• European Central Bank website hacked (BBC)
• Analysis: BOE MPC divided over hike case; first dissents Aug? (MNI)
• Israeli economy resilient amid conflict, c.bank dep. gov says (Globe and Mail)
• Central banks’ monetary policy impact fades: Munich Re (Bloomberg)
• Bangladesh monetary policy is working well (Daily Star)
• Should the Fed have to play by a rule? (CBS Moneywatch)
• Turkish c.bank makes dollar only alternative currency for lira reserves (Reuters)
• Nigeria must boost FX reserves before cutting rates:central bank official (Reuters)
• RBI likely to maintain status quo in Aug policy: SBI’s Bhattacharya (Firstbiz)
• Sri Lankan, Indian central banks agree scope for govt debt buys (Reuters)
• Singapore central bank says too early to ease property curbs (Bloomberg)
• IMF: Fed should keep explicit policy target rate, not range (MNI)
• Chile central bank chief sees stronger growth in 2015 (Reuters)
• Analysts doubt Hungary central bank governor’s guidance (WSJ)
• Brazil may approve Caixa’s capital plan by year-end-sources (Reuters)
• Europe debt wish places huge burden on central bank (Rogoff/Bangkok Post) 

        www.CentralBankNews.info

New Zealand raises rate for 4th time but will now pause

    New Zealand's central bank raised its policy rate for the fourth time in a row but signaled that it would keep rates on hold for a while, saying it was "prudent that there now be a period of assessment before interest rates adjust further towards a more-neutral level."
    The Reserve Bank of New Zealand (RBNZ) raised its Official Cash Rate (OCR) by another 25 basis points to 3.50 percent, as widely expected, and has now raised it by a total of 100 basis points since March when it became the first central bank among the advanced economies to raise its rate since July 2011 to curb inflationary pressures.
    The RBNZ has often said the strong exchange rate of the New Zealand dollar, known as the kiwi, was not sustainable and today ratcheted up its language and warned it would decline in response to a fall in export prices for dairy and timber in recent months.
    "With the exchange rate yet to adjust to weakening commodity prices, the level of the New Zealand dollar is unjustified and unsustainable and there is potential for a significant fall," the RBNZ's governor, Graeme Wheeler, said in a statement.

Contraction in global banking activity ends in Q1 - BIS

    The contraction in global banking activity since late 2011 ended in the first quarter of this year as cross-border claims of major banks on borrowers rose by $580 billion from the end of 2013 to the end of March, according to the Bank for International Settlements (BIS).
    The upturn in overall lending activity was seen across many countries and sectors, with the largest increase in credit to borrowers in China while claims on the rest of Asia, Latin America, Africa and the Middle East also rose, but at a more modest pace.
    BIS, which only last month in its annual report warned of the dangers from the growing reliance on debt, said loans to China rose by $133 billion in the first quarter for an annual rise of 49 percent, pushing the outstanding stock of claims to just over $1 trillion.
    Even Europe, which is recovering after two years of recession, saw a $158 billion rise in claims in the first quarter for the first increase since early 2012.
    Cross-border lending to non-banks in the United States was also strong, said Swiss-based BIS, which collects data on international lending by globally-active banks.
     The amount of credit extended by banks to other banks rose for the first time since late 2011, with total interbank claims up by $306 billion, including a $111 billion rise in intra-euro activity.

Central Bank News Link List - July 23, 2014 - IMF says Fed may have scope for zero rate past mid-2015

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.

• IMF says Fed may have scope for zero rate past mid-2015 (Bloomberg)
• BOE Carney: Spare capacity being used up faster than expected  (MNI)
• Turkish central bank defends tight policy ahead of key report (Hurriyet)
• Mexico economy could pick up in H2 2014-central bank’s Sanchez (Reuters)
• IMF says German ship loans remain concern before ECB bank test (Bloomberg)
• Bulgarian central bank governor ready to step down (Reuters)
• G20’s FSB recommends multi-pronged reform to Libor (Reuters)
• Jobs hold sway over Yellen-Carney as central banks splinter (Bloomberg)
• Bank Indonesia chief seeks economic reform for deficit risks (Bloomberg)
• Fed worries about effects of its new interest rate tool on markets (WSJ)
• Bank of Japan majority won’t be swayed by Kuroda ideology (Bloomberg)
• Draghi cedes euro control to Yellen on Fed rate wagers (Bloomberg)
• Portugal, Greece have money if banks need, Regling says (Bloomberg)
• Czech central banker concerned over eurozone deflation risk (WSJ)
• Central banks can only do so much to spur recovery, RBA warns (The Australian)
• Bangladesh central bank will announce capital market friendly policy (New Age)
• Serbian central bank intervenes to bolster dinar-dealers (Reuters)
• Croatia’s financial stability risks lessening, says central bank (Dalje)
• Wall Street axed from guest list for Jackson Hole Fed conference (Financial Review)
•  
•  www.CentralBankNews.info

Nigeria maintains rate to support stable naira FX rate

    Nigeria's central bank maintained its policy rate at 12.0 percent, as expected, recognizing "the necessity of sustaining a stable naira exchange rate even as it has to deal with the delicate balancing of the need for a low interest rate regime."
    The Central Bank of Nigeria (CBN), which has kept its rate steady since October 2011, said pressure points include underlying pressure from food and core inflation and "the risks that could emanate from the likely increase in aggregate spending in the run up to the 2015 general election" along with the implications of the U.S. Federal Reserve's tapering of quantitative easing on capital inflows and external reserves.
    Chairing his first meeting as governor, Godwin Emefiele said the CBN's monetary committee was satisfied with the relative stability in the macroeconomy as reflected in "impressive growth rates, stable consumer prices and exchange rate as well as increased external reserves."
    However, he added that the translation of this stability to gains in employment and access to finance by small and medium-sized businesses is weak, noting the potential of the power sector to stimulate output growth and thus employment through enhanced investment if challenges facing the sector are effectively and appropriately addressed.

Hungary cuts rate 20 bps but ends 2-year easing cycle

    Hungary's central bank cut its base rate by 20 basis points to 2.10 percent but said its "two-year easing cycle of a significant cumulative reduction of 490 basis points has ended" while the "macroeconomic outlook points in the direct of persistently loose monetary conditions.
    The National Bank of Hungary's monetary council issued the following statement:

"At its meeting on 22 July 2014, the Monetary Council reviewed the latest economic and financial developments and voted to reduce the central bank base rate by 20 basis points from 2.30% to 2.10%, with effect from 23 July 2014.

In the Council’s judgement, Hungarian economic growth is likely to continue. While the pace of economic activity is strengthening, output remains below potential and is likely to approach that level in the course of next year. Despite the pick-up in domestic demand, capacity utilisation is expected to improve only gradually due to the protracted recovery in Hungary’s export markets. With employment rising, the unemployment rate is falling, but still exceeds its long-term level determined by structural factors. Inflationary pressures in the economy are likely to remain moderate for an extended period.

Central Bank News Link List - July 21, 2014 - Carney’s Canada years signal BOE rates caution

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.

• Carney’s Canada years signal BOE rates caution (Bloomberg)
• Wall Street lags central bank’s rate-rise expectations (Reuters)
• New Zealand central bank to raise rates again, but likely signal a pause (Reuters)
• South Korea finance minister, central bank chief cite risks to growth (Reuters)
• Nigeria central bank to hold rates as new chief eyes inflation (Business Day)
• Brazil analysts cut 2014 GDP call below 1% for first time (Bloomberg)
• Pakistan: the inevitable happened (Business Recorder)
• Sterling investors start to price in Scotland vote risk (Reuters)
• China tests new monetary policy tool (Dow Jones)
• Swiss National Bank, China agree on currency-swap deal (WSJ)
• Germany’s Schaeuble warns ECB on asset bubbles (AFP)
• Germany’s Q2 growth stagnated: central bank (Xinhua)
• Saudi King appoints Al-Furaih as deputy central bank governor (Bloomberg)
• Eurozone needs quantitative easing (FT Editorial)
• Bangladesh credit expansion, rate cuts on table (Financial Express)
• Investors give thumbs up to Nepal monetary policy (Republica)
• Outcome of ECB review of banks should be credible, says Moody’s (IBTimes)
• Irish central bank suffers 75 m euro paper loss as gold plunges (Independent)
• Analysts see Kenya inflation staying within targets (The Star)
• Sri Lanka bank credit subdued in May (Lanka Business Online)
• Have central banks been breaking the law? (The Telegraph)

          www.CentralBankNews.info

This week in monetary policy (UPDATE): Nigeria, Hungary, New Zealand, Russia, Trinidad & Tobago and Bangladesh

    This week (July 21-25, 2014) five central banks will decide on monetary policy, comprising the countries of Nigeria, Hungary, New Zealand, Russia 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
NIGERIA	FM	22-Jul	12.00%	12.00%
HUNGARY	EM	22-Jul	2.30%	4.00%
NEW ZEALAND	DM	24-Jul	3.25%	2.50%
RUSSIA	EM	25-Jul	7.50%	8.25%
TRINIDAD AND TOBAGO		25-Jul	2.75%	2.75%
BANGLADESH	FM	26-Jul	7.75%	7.75%

   
www.CentralBankNews.info

Monetary Policy Week in Review – Jul 14-18, 2014: Fed debate intensifies, 3 central banks raise rates, 2 cut

    Last week in global monetary policy, three central banks raised policy rates (South Africa, Egypt and Ukraine) while two banks (Turkey and Chile) cut their rates as the debate over the U.S. Federal Reserve’s eventual interest rate rise intensified.
    There were three developments surrounding Fed policy that stood out last week.
    First, the Fed’s statement in its latest Monetary Policy Report that the share prices of social media and biotech firms appeared  “substantially stretched.”
    Second, a series of news stories with major investors and Wall Street financiers calling for the Fed to start to normalize monetary policy and think about rate rises.
    Third, Fed Chair Janet Yellen’s testimony to a Senate committee that included the statement that rates could be raised sooner if the labour market improves more quickly than anticipated.
    While Yellen’s reflections on the labor markets and investors’ views of  Fed policy are part of the normal evolution of a policy consensus in a democratic society, the Fed’s mention of the share prices of two specific stock sectors was a surprise.
    Economists and central bankers have for years debated how monetary policy should react to booms in asset prices and the risk of financial instability, a debate that most recently hit the headlines following the annual report by the Bank for International Settlements (BIS).
    The Fed’s statement about the stock prices of social media and biotech firms is thus an example of how central banks initially will react when they perceive that certain assets are inflated.

LIST OF LAST WEEK’S CENTRAL BANK DECISIONS:

• Sri Lanka holds rates, sees inflation in mid-single digits
• Mauritius holds rate, expects steady stance to end-2014
• BOJ maintains policy stance, trims 2014 growth forecast
• Chile cuts rate 25 bps, will consider further reductions
• Canada holds rate, neutral about next change in policy
• Ukraine hikes rate 300 bps to 12.5% to boost hryvnia
• Brazil holds rate steady at 11.0% "at this moment"
• Turkey cuts repo, overnight borrowing rates 50 bps
• South Africa raises rate 25 bps but still below neutral
• Egypt raises rate 100 bps in preemptive strike vs inflation
• Pakistan maintains rate, inflation expectations benign

TABLE WITH LAST WEEK’S MONETARY POLICY DECISIONS:

COUNTRY	MSCI	NEW RATE	OLD RATE	1 YEAR AGO
SRI LANKA	FM	6.50%	6.50%	7.00%
MAURITIUS	FM	4.65%	4.65%	4.65%
JAPAN	DM	N/A	N/A	N/A
CHILE	EM	3.75%	4.00%	5.00%
CANADA	DM	1.00%	1.00%	1.00%
UKRAINE	FM	12.50%	9.50%	7.00%
BRAZIL	EM	11.00%	11.00%	8.50%
TURKEY	EM	8.25%	8.75%	4.50%
EGYPT	EM	9.25%	8.25%	9.75%
SOUTH AFRICA	EM	5.75%	5.50%	5.00%
PAKISTAN	FM	10.00%	10.00%	9.00%

    This week (Week 30) five central banks will decide on monetary policy, comprising the countries of Nigeria, Hungary, New Zealand, Russia and Trinidad and Tobago.

TABLE WITH THIS WEEK’S MONETARY POLICY DECISIONS:

COUNTRY	MSCI	DATE	CURRENT  RATE	1 YEAR AGO
NIGERIA	FM	22-Jul	12.00%	12.00%
HUNGARY	EM	22-Jul	2.30%	4.00%
NEW ZEALAND	DM	24-Jul	3.25%	2.50%
RUSSIA	EM	25-Jul	7.50%	8.25%
TRINIDAD AND TOBAGO		25-Jul	2.75%	2.75%

    www.CentralBankNews.info