Monday, January 21, 2019

Paraguay maintains rate as economy expands steadily

     Paraguay's central bank left its monetary policy rate steady at 5.25 percent, saying the economy continues to expand moderately while inflation has been on a downward trajectory in recent months but the outlook remains consistent with the inflation objective.
     The Central Bank of Paraguay (BCP), which has maintained its rate since cutting it by 25 basis points in August 2017, added that on a regional level, economic activity was continuing to contract in Argentina while data for Brazil reflect favorable signs and positive expectations for important economic reforms.
     In December Paraguay's inflation rate eased to 3.2 percent, below BCP's 4.0 percent target, while the economy was estimated to have expanded 4.0 percent in 2018 and is forecast to expand at the same rate in 2019.
     Since 2003 Paraguay's economy has averaged annual growth of 4.5 percent, well above the growth seen in most other countries in South America, supported by what the International Monetary Fund (IMF) has described as "prudent macroeconomic policies."
      In November the IMF said BCP's policy rate was supportive of growth and credit is growing by an annual 14 percent, boosting domestic demand.
     "External developments, including economic developments in Brazil and Argentina pose downside risks, but Paraguay has demonstrated resilience to past recessions in these countries. Monetary policy will have to strike a balance between supporting the economy and preventing overheating," the IMF said on Nov. 15, 2018.

Sunday, January 20, 2019

This week in monetary policy: Paraguay, Nigeria, Japan, South Korea, Malaysia, Norway, ECB and Angola

    This week - January 20 through January 26 - central banks from 8 countries or jurisdictions are scheduled to decide on monetary policy: Paraguay, Nigeria, Japan, South Korea, Malaysia, Norway, the European Central Bank and Angola.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, 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 accessed by clicking on This Week.

JAN 20 - JAN 26, 2019:
COUNTRY                   DATE                     RATE                LATEST                    YTD              1 YR AGO
SOUTH KOREA24-Jan1.75%2501.50%
EURO AREA24-Jan0.00%000.00%

2019 Global Central Bank Calendar

     Following is the 2019 calendar for monetary policy.

     The table includes scheduled meetings for more than 45 central bank committees or boards that decide monetary policy. In the event meetings take place over several days, the date listed is for the final day when decisions are normally announced.
     The calendar is updated regularly to reflect the latest information as some central banks only release tentative schedules at the beginning of the year while other central banks only schedule their meetings a few months in advance.
     Readers are encouraged to check the latest version of the calendar by clicking here.
     You may replicate the table in part or in full only if cite Central Bank News as the source or provide a link to

7-Jan    ILSIsraelBank of Israel
8-Jan    RONRomaniaNational Bank of Romania
9-Jan    PLNPolandNational Bank of Poland
9-Jan    CADCanadaBank of Canada
10-Jan    RSDSerbiaNational Bank of Serbia
10-Jan    PENPeruCentral Reserve Bank of Peru
14-Jan    KZTKazakhstanNational Bank of Kazakhstan
16-Jan    TRYTurkeyCentral Bank of Republic of Turkey
17-Jan    FJDFijiReserve Bank of Fiji
17-Jan     IDRIndonesiaBank Indonesia
17-Jan    ZARSouth AfricaSouth African Reserve Bank
21-Jan    PYGParaguayCentral Bank of Paraguay
22-Jan    NGNNigeriaCentral Bank of Nigeria
23-Jan    JPYJapanBank of Japan
24-Jan    KRWSouth KoreaBank of Korea
24-Jan    MYRMalaysiaCentral Bank of Malaysia
24-Jan    NOKNorwayNorges Bank
24-Jan    EUREuro areaEuropean Central Bank
25-Jan    AOAAngolaBank of Angola
28-Jan    GHSGhanaBank of Ghana
28-Jan    KESKenya Central Bank of Kenya 
29-Jan    HUFHungaryCentral Bank of Hungary
29-Jan    AMDArmeniaCentral Bank of the Republic of Armenia
30-Jan    GELGeorgiaNational Bank of Georgia
30-Jan    TJSTajikistanNational Bank of Tajikistan
30-Jan    USDUnited StatesFederal Reserve
30-Jan    CLPChileCentral Bank of Chile
31-Jan    UAH UkraineNational Bank of Ukraine
31-Jan    BGNBulgariaBulgarian National Bank 
31-Jan    COPColombiaCentral Bank of Colombia 
31-Jan    DOPDominican RepublicCentral Bank of the Dominican Rep.

Thursday, January 17, 2019

Indonesia holds rate steady to help narrow C/A deficit

     Indonesia's central bank kept its benchmark BI 7-day reverse repo rate steady at 6.0 percent, reiterating this "is consistent with ongoing efforts to reduce the current account deficit to a manageable threshold and maintain the attractiveness of domestic financial assets."
     However, Bank Indonesia (BI) omitted a reference from its December statement that the policy rate was also kept steady in consideration of the global trend in interest rates in the next few months, illustrating the recent downward shift in the outlook for U.S. and European growth and thus monetary policy.
      The decision to keep the rate steady was largely expected after BI Governor Perry Warjiyo on Wednesday told a panel of lawmakers that BI's policy remains pre-emptive and the policy rate had almost reached its peak.
     Wariyo added a more favorable outlook for U.S. interest rates would allow Indonesia to rely on other instruments to stabilize financial markets and support economic growth.
      Last year BI raised its policy rate 6 times and by a total of 175 basis points to bolster the exchange rate of the rupiah, which fell sharply from February to November on concern over the country's widening current account deficit and capital outflows amid a general strengthening of the U.S. dollar that drew strength from the Federal Reserve's rate hikes.
     But since BI's last rate hike in mid-November, supported by currency and bond market intervention, the rupiah has roared back to levels seen last June.
    Today the rupiah was trading at 14,188 to the dollar, up 7.3 percent from lows seen in late October and up 1.9 percent this year. However, the rupiah is still down 4.3 percent since the start of 2018.
      In today's statement BI said it was continuing its strategy of maintaining liquidity in the rupiah money market and foreign exchange market as part of its aim to keep the current account deficit below 2.5 percent of gross domestic product in 2019.
     In the third quarter of last year Indonesia's current account deficit almost doubled to US$8.8 billion, or 3.37 percent of GDP, the widest since the second quarter of 2014, boosted by the rising cost of oil imports.

Wednesday, January 16, 2019

Turkey maintains rate and tightening bias

     Turkey's central bank left its policy rate - the one-week repo rate - steady at 24.0 percent,  as expected, citing "some" improvement to the outlook for inflation but cautioned that risks to price still prevail and it will maintain its tight monetary policy stance until there is a "significant improvement" in the outlook for inflation.
      The Central Bank of the Republic of Turkey (CBRT), which has maintained its rate since raising its sharply in September as prices began to rise in response to the fall in the lira's exchange rate, reiterated its guidance from December that it was keeping a close eye on inflation expectations, prices, the lagged effect of past rate hikes and fiscal policy, confirming that "if needed, further monetary tightening will be delivered."
     Turkey's inflation rate has decelerated in the last two months and CBRT said the rebalancing of the economy was becoming more noticeable and import prices and domestic demand had helped improve the outlook for inflation.
      External demand was also maintaining its strength while economic activity was continuing to slow down, partly due to tight financial conditions. The improvement in the current account was expected to continue to improve, the central bank said.
      Headline inflation in December eased to 20.3 percent from 21.62 percent in November and a 15-year high of 25.24 percent in October but most analysts had expected the CBRT to keep its rate steady this month due to the tightening bias that has remained in place since September last year and to avoid any pressure on the lira.
      The CBRT's medium-term inflation target is 5.0 percent and last November the central bank raised its inflation forecast for 2019 to 15.2 percent from an earlier 9.3 percent and forecast inflation would decelerate to 9.3 percent by the end of 2020.
      September's 625-basis point rate hike came after two earlier hikes in May and June, with the policy rate rising by a total of 16 percentage points last year.
      The sharp hike in September came after the central bank in July kept its rate steady, disappointing financial markets and raising further doubts over CBRT's independence from political influence and its commitment to fighting inflation.
      After falling sharply in August, the September hike helped reverse the trend of the lira and since early December last year it has remained relatively stable.
      Today the lira was trading at 5.35 to the U.S. dollar, down a bit over 1 percent this year and down almost one-third since the start of 2018.

Monday, January 14, 2019

Kazakhstan maintains rate but may tighten in March

     Kazakhstan's central bank kept its base rate steady at 9.25 percent but warned it may raise its rate in March if oil markets remain volatile amid improving domestic demand and upward pressure on import prices from Russia.
     The National Bank of Kazakhstan (NBK), which raised its rate in October 2018, said it still expects inflation to remain within the upper range of its new and lower inflation target for 2019 in the absence of any significant shocks.
     However, NBK said there was upward pressure on inflation from higher oil prices, a potential for inflationary pressure on domestic prices from imports from Russia, where inflation is estimated to rise further, and an expansion in domestic demand from fiscal incentives.
     "Anchoring inflationary expectations around the current level and improving their resistance in the short term remains an important objective of the National Bank of Kazakhstan," NBK said, underscoring that preventing inflation from exceeding its target remains a "high priority."
     Headline inflation in Kazakhstan, where oil accounts for around 60 percent of exports, was steady for the third month in a row in December at 5.3 percent but core inflation rose for the second month to 6.4 percent, above a 2018-low of 6.07 percent in August and 6.2 percent in December 2017.
     The NBK has lowered its inflation target in recent years from 6.0-8.0 percent in 2016/17 to 5.0-7.0 percent in 2018 and 4.0-6.0 percent in 2019.
     By the end of 2020 and following years NBK wants to lower inflation to close to 4.0 percent.
     The NBK's 25-basis points rate hike in October last year came after it kept the rate unchanged from June when it wrapped up a two-year easing campaign in which it lowered the rate by a total of 800 points.
     NBK said current conditions still allow it to keep its monetary policy stance close to neutral, a level that maintains a balance between reaching its inflation target and keeping economic growth close to its potential level.
     But there is considerable uncertainty regarding the future outlook, NBK said, and domestic demand is rising due to growing real income while consumer lending was still up 11 percent year-on-year in November 2018 despite slowing slightly.
     Kazakhstan's economy is in the midst of a major transformation that aims to reduce the footprint of the state and the economy's reliance of oil following the fall in oil prices in 2014, which hit growth sharply in 2015 and 2016.
      In the first 9 months of 2018 Kazakhstan's gross domestic product grew 4.2 percent and the International Monetary Fund has forecast average growth of 3.7 percent in 2018, down from 4.0 percent in 2017, and growth of 3.2 percent in 2019 and 2020.
     The exchange rate of the tenge, which often moves in synch with the Russian ruble, fell steadily last year and has continued to decline this year. Today the tenge was trading at 379.2 to the U.S. dollar, down 1.6 percent this year and down 12.2 percent since the start of 2018.

Sunday, January 13, 2019

This week in monetary policy: Kazakhstan, Turkey, Fiji, Indonesia and South Africa

    This week - January 13 through January 19 - central banks from 5 countries or jurisdictions are scheduled to decide on monetary policy: Kazakhstan, Turkey, Fiji, Indonesia and South Africa.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, the rate one year ago, and the country’s MSCI classification.
    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

JAN 13 - JAN 19, 2019:
COUNTRY                   DATE                     RATE                LATEST                    YTD              1 YR AGO
SOUTH AFRICA17-Jan6.75%2506.75%

Thursday, January 10, 2019

Peru holds rate, policy easy as economy below potential

     Peru's central bank kept its monetary policy rate unchanged at 2.75 percent, saying it appropriate to maintain an expansive monetary policy as long as inflation expectations remain anchored and economic activity remains below its potential.
     The Central Reserve Bank of Peru (BCRP), which has kept its rate steady since lowering it in March last year, added inflation is projected to remain within the target range and around 2 percent.
     Between May 2017 and March 2018 BCRP cut its key rate by 150 basis points. BCRP targets inflation of 2.0 percent, plus/minus 1 percentage point.
     In December Peru's inflation rate was largely steady at 2.19 percent compared with 2.17 percent in November but still at a 2018 high and in line with the central bank's 2.0 percent target.
     In its December inflation report, released earlier today, BCRP's forecast for inflation in 2019 was raised slightly to 2.1 percent from 2.0 percent forecast in September while inflation in 2018 was estimated at 2.1 percent, up from 2017's 1.4 percent. In 2020 inflation is seen averaging 2.0 percent.
     BCRP added that most indicators of business expectations had improved and were optimistic while economic activity continued to improve.
     In its latest forecast, BCRP maintained its forecast for the economy to expand by 4.0 percent in 2019, similar to growth in 2018, which was up from 2.5 percent in 2017.
     Growth in 2020 was also forecast at 4.0 percent.
     Peru's gross domestic product slowed in the third quarter to year-on-year growth of 2.3 percent from 5.5 percent in the second quarter when mining output and public works slowed.
    After sliding most of last year, Peru's sol has gained strength this year and was trading at 3.34 to the U.S. dollar today, up 0.9 percent this year but down 2.4 percent since the start of 2018.

Monday, January 7, 2019

This week in monetary policy: Israel, Romania, Canada, Poland, Serbia and Peru

    This week - January 6 through January 12 - central banks from 6 countries or jurisdictions are scheduled to decide on monetary policy: Israel, Romania, Canada, Poland, Serbia and Peru.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, the rate one year ago, and the country’s MSCI classification.
    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

JAN 6 - JAN 12, 2019:
COUNTRY                   DATE                     RATE                LATEST                    YTD              1 YR AGO

Friday, January 4, 2019

China cuts reserve ratio 1 pct point, frees up 800 bln yuan

      The People's Bank of China (PBOC) became the first central bank in 2019 to change its monetary policy stance, lowering its reserve requirement ratio for large financial institutions by a total of one percentage point, resulting in the release of a net 800 billion yuan in funds can be used to boost loans to private companies.
      The cut in the amount of funds that banks must hold at China's central bank will take place in two steps, with the first cut of 0.5 percentage points as of Jan. 15 and the second of 0.5 points as of Jan. 25, coinciding with the Spring Festival, also known as Chinese New Year of the Lunar New Year, when liquidity conditions tend to tighten.
      The lower reserve requirement will release a total of about 1.5 trillion yuan of funds but the PBOC will not renew a Medium Term Lending Facility (MLF) that expires in the first quarter of this year, resulting in a net release of 800 billion yuan.
      In its statement, PBOC said China's economy was continuing to develop in a healthy manner and it would continue to implement a "prudent" monetary policy, with a "moderate" degree of tightness.
      A spokesman added the cut in the reserve ratio did not signify a "flood" of funds and the orientation of a stable monetary policy had not changed.
      PBOC's has now cut its reserve requirement for large banks four times since 2017.
      In 2018 the reserve ratio was cut by a total of 250 basis points, with the ratio cut by 100 points in April - the first cut since February 2016 - then by 50 points in June and by 100 points in October.


Monday, December 31, 2018

Dominican Rep. holds rate, attentive to U.S. Fed, dollar

     The Dominican Republic's central bank kept its monetary policy rate at 5.50 percent, saying it is attentive to the normalization of monetary policy in the United States and its impact on the dollar and the price of oil and is "prepared to react in a timely manner to any factor that can generate inflationary deviations."
     The Central Bank of the Dominican Republic (BCRD), which has maintained its rate since raising it by 25 basis points in July, added inflation is forecast to gradually converge to its target range of 4.0 percent, plus/minus 1 percentage point, over the next year.
     Inflation in the Dominican Republic dropped by 0.35 percent in November for accumulated inflation in the first 11 months of 1.39 percent, in line with the bank's forecast for inflation to end the year at 1.3 percent, BCRD said.
      Economic activity is continuing to grow above its potential in the context of an absence of inflationary pressures, the central bank said, adding gross domestic product is estimated to expand by 7.0 percent during the year, driven by investment and private consumption.
      The Dominican peso has depreciated steadily this year against the U.S. dollar and was trading at 50.45 to the dollar today, down 5.3 percent this year.