The past week in monetary policy saw 2 central banks cutting interest rates (Israel -25bps to 2.50%, and Thailand -25bps to 3.00%), and 1 bank cutting its reserve ratio (India cut CRR 50bps to 5.50%). Meanwhile 7 central banks held rates unchanged (Japan 0.10%, India 8.50%, Hungary 7.00%, Turkey 5.75%, New Zealand 2.50%, USA 0-0.25%, and Hong Kong 0.50%). The week also featured the US Federal Reserve announcing an inflation target of 2 percent and releasing its inaugural economic forecasts as part of its efforts to improve transparency.
Following are some of the key quotes and comments from the banks that met, often these comments give an insight into how the central bankers are thinking and how their economies are faring.
Looking at the central bank calendar, the week ahead is relatively quiet with just a handful of emerging market and frontier market central banks meeting to review policy settings. Aside from central bank meetings, there will be further European summits on the debt crisis, and the release of high frequency economic indicators such as the Purchasing Manager's Index (PMI) for many countries. The week also features FOMC Chairman, Ben Bernanke, testifying before the House Budget Committee - this will be watched by many for any clues of further quantitative easing.