Mexico's central bank left its benchmark interest rate unchanged at 4.50 percent, as expected, but repeated recent warnings that it will raise rates if inflation starts to accelerate. However, the bank added that upside risks to inflation have eased and described the recent fall in prices as "remarkable"
Banco de Mexico said there was no evidence so far of widespread price increases, with the recent rise in inflation due to temporary shocks, and the trend toward lower inflation seems to be confirmed.
"However, if new shocks to inflation - even if presumed to be transient and the trend in headline and core inflation are not consolidated - the Board believes that it could adjust the benchmark interest rate upward in order to strengthen the anchoring of inflation expectations, prevent the pollution to overall national prices and not compromise the permanent convergence toward the 3 percent target," Banco de Mexico said in a statement.
The bank said the decline in Mexico's inflation rate to 4.6 percent in October from September's 4.8 percent was remarkable but it was still above the central bank's target of 3 percent, plus/minus one percentage point, and is expected to end the year below 4 percent.
The turnaround in inflation was due to lower increases in core and non-core price components, helped by the rise in the Mexican peso since the middle of the year. The rise in the cost of services had fallen to a record low of close to 2 percent, reflecting domestic determinants of inflation.
Friday, November 30, 2012
Central Bank News Link List - Nov 30, 2012: Leave "fairy world" behind, Draghi tells euro zone
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.)
- Leave "fairy world" behind, Draghi tells euro zone (Reuters)
- Japan's Abe: Specific monetary steps for BOJ to decide (Reuters)
- ECB withholding secret Greek swaps file keeps taxpayers in dark (Bloomberg)
- China's monetary policy since the turn of the century (caixin online)
- Spain's bank rescue is part bail-in, part bail-out (Reuters)
- Ugandan shilling firms, eye on central bank rate decision (Reuters)
- Insight: FOMC strives for better communication, credibility (MNI)
- Nigerian banks are financially stable - central bank (channelstv)
- www.CentralBankNews.info
Thursday, November 29, 2012
Tunisia holds rate, economy recovers, inflation may rise
Tunisia's central bank held its benchmark interest rate steady at 3.75 percent as the economy continues to improve gradually but inflation could rise in coming months.
Banque Centrale de Tunisie, which raised its rate in August by 25 basis points, said the pressure on prices and the balance of payments warrants watching and financial balances must be preserved.
Tunisia's consumer prices rose 0.8 percent in October from the previous month for an annual rise of 5.3 percent, down from September's 5.7 percent due to lower food prices, the bank said, adding:
"It is worth noting that certain provisional indicators augur for the return of a rise in inflation in coming months."
Tunisia's central bank does not have a specific target for inflation, but the governor said last month that the bank would tolerate inflation of up to 5 percent.
Tunisia's economy has been gradually improving this year after contracting by 2.2 percent last year following political unrest that triggered the Arab Spring across North Africa.
The central bank said the economy expanded by an annual 2.6 percent in the third quarter for a 3 percent expansion in the first nine months, with agriculture, services, mining and energy improving.
"By contrast, pressure from lethargic external demand keeps on affecting production in manufacturing industries and exports because of the persistence of economic and financial difficulties in Tunisia's main partner countries in the European Union," the bank said.
Banque Centrale de Tunisie, which raised its rate in August by 25 basis points, said the pressure on prices and the balance of payments warrants watching and financial balances must be preserved.
Tunisia's consumer prices rose 0.8 percent in October from the previous month for an annual rise of 5.3 percent, down from September's 5.7 percent due to lower food prices, the bank said, adding:
"It is worth noting that certain provisional indicators augur for the return of a rise in inflation in coming months."
Tunisia's central bank does not have a specific target for inflation, but the governor said last month that the bank would tolerate inflation of up to 5 percent.
Tunisia's economy has been gradually improving this year after contracting by 2.2 percent last year following political unrest that triggered the Arab Spring across North Africa.
The central bank said the economy expanded by an annual 2.6 percent in the third quarter for a 3 percent expansion in the first nine months, with agriculture, services, mining and energy improving.
"By contrast, pressure from lethargic external demand keeps on affecting production in manufacturing industries and exports because of the persistence of economic and financial difficulties in Tunisia's main partner countries in the European Union," the bank said.
Wednesday, November 28, 2012
Central Bank News Link List - Nov 29, 2012: Fed's Dudley downplays jobs growth, eyes 2013 bond buys
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.)
- Fed's Dudley downplays jobs growth, eyes 2013 bond buys (Reuters)
- EU Parliament endorses handing ECB bank supervisory powers (Bloomberg)
- Turkish central bank sharpens resistance to credit bubble (Reuters)
- BOE King: Banks' capital problem solvable (MNI)
- Mexico's central bank likely to extend long monetary pause (Dow Jones)
- High growth, stable inflation: BSP policy stance appropriate (Malaya business insight)
- World economy is best shape since 2011 - investors (Bloomberg)
- BOE's King ready to adjust monetary policy if needed (Dow Jones)
- Bank of England's new chief to keep policy as is for at least 18 months:poll (Reuters)
- Japan should adopt U.K.-style targets for BOJ, Abe adviser says (Reuters)
- Inappropriate to move rate now - Marcus (money web)
- Japan's central bank policymaker warns of downside risks to economy (kuna)
- Central bank governor: "Cautious Optimism" for Trinidad's economy (caribjournal)
- www.CentralBankNews.info
Brazil holds rate steady, signals stable policy for long time
Brazil's central bank kept its benchmark Selic interest rate steady at a record low 7.25 percent, as widely expected, saying stable monetary conditions for a "sufficiently long period of time" would be the right strategy to ensure that inflation meets the bank's target.
Banco Central do Brazil, which has cut its rate 10 times in a row and seven times in 2012 to stimulate the economy, said the policy decision by its committee was unanimous and no bias was indicated. It was the final meeting of the Copom committee this year.
Inflation rose to 5.45 percent in October - the fourth monthly increase in a row - from 5.28 percent in September. The bank targets inflation of 4.5 percent, plus/minus 2 percentage points. In the month to mid-November, inflation rose to 5.64 percent
"Considering the balance of risks to inflation, recovery in domestic activity and the complexity involved in the international environment, the Committee believes that the stability of monetary conditions for a sufficiently long period of time is the most appropriate strategy to ensure the convergence of inflation to the goal, albeit not linear," the bank said in statement.
Brazil's Gross Domestic Product rose by only 0.50 percent in the second quarter from the same quarter last year, down from an annual rate of 0.8 percent in the first and 1.4 percent in the fourth.
The Selic rate has been cut by 375 basis points this year.
Banco Central do Brazil, which has cut its rate 10 times in a row and seven times in 2012 to stimulate the economy, said the policy decision by its committee was unanimous and no bias was indicated. It was the final meeting of the Copom committee this year.
Inflation rose to 5.45 percent in October - the fourth monthly increase in a row - from 5.28 percent in September. The bank targets inflation of 4.5 percent, plus/minus 2 percentage points. In the month to mid-November, inflation rose to 5.64 percent
"Considering the balance of risks to inflation, recovery in domestic activity and the complexity involved in the international environment, the Committee believes that the stability of monetary conditions for a sufficiently long period of time is the most appropriate strategy to ensure the convergence of inflation to the goal, albeit not linear," the bank said in statement.
Brazil's Gross Domestic Product rose by only 0.50 percent in the second quarter from the same quarter last year, down from an annual rate of 0.8 percent in the first and 1.4 percent in the fourth.
The Selic rate has been cut by 375 basis points this year.
Central Bank News Link List - Nov 28, 2012: Brazil set to end year of interest rate cuts
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.)
- Brazil set to end year of interest rate cuts (Reuters)
- ECB wants "executioner" to terminate Europe's weak banks (Reuters)
- Fed's Evans: To hike when jobless rate below 6.5% (Market Watch)
- Chile central bank only mulled rate hold in Nov-minutes (Reuters)
- Credit rating firms in EU to face sovereign-debt limits (Bloomberg)
- European court to rule over ECB's secret Greek file (Bloomberg)
- Australia central-bank dove upbeat ahead of meet (Market Watch)
- Bank of Canada not expected to hike rates until late 2013 (Business Rec/Reuters)
- Swedish central bank more likely to cut rates than raise (Business Rec/Reuters)
- Singapore c.bank flags risks from rising corporate debt (Reuters)
- U.S. said to weigh tightening rules for foreign lenders (Bloomberg)
- UBS challenges trader math in '13 Chile rate boost (Bloomberg)
- Carney track record hints at Bank of England path (Reuters)
- Carney favors rate plan copied by Bernanke over BOE doubt (Bloomberg)
- Carney will regret taking Bank of England reins (Market Watch)
- Zambia: Interest rates too high (IOL)
- www.CentralBankNews.info
Thailand holds rate as downside growth risks subside
Thailand's central bank held its policy rate unchanged at 2.75 percent, as expected, saying downside risks to economic growth were starting to subside and inflationary pressures were in check.
In a surprisingly upbeat statement, the Bank of Thailand said the country's positive growth momentum was continuing and the impact of slow global growth "has so far remained limited only to export-related sectors, which the greater-than-expected strength in domestic demand appeared to provide sufficient cushion against the adverse impact of export slowdown."
The Thai central bank, which has cut rates twice this year for a total reduction of 50 basis points, said exports were projected to recover in the first half of 2013 on the back of an anticipated improvement in the global economy, with private consumption and investment continuing to drive the economy.
"The MPC viewed that as downside risks to growth subsided with inflationary pressures in check, the current policy rate remained accommodative and conducive to growth," the bank said after a meeting of its Monetary Policy Committee.
The global outlook showed signs of stabilization on the back of better-than-expected U.S. and China data, although the fiscal cliff remained a risk factor, the bank said.
In a surprisingly upbeat statement, the Bank of Thailand said the country's positive growth momentum was continuing and the impact of slow global growth "has so far remained limited only to export-related sectors, which the greater-than-expected strength in domestic demand appeared to provide sufficient cushion against the adverse impact of export slowdown."
The Thai central bank, which has cut rates twice this year for a total reduction of 50 basis points, said exports were projected to recover in the first half of 2013 on the back of an anticipated improvement in the global economy, with private consumption and investment continuing to drive the economy.
"The MPC viewed that as downside risks to growth subsided with inflationary pressures in check, the current policy rate remained accommodative and conducive to growth," the bank said after a meeting of its Monetary Policy Committee.
The global outlook showed signs of stabilization on the back of better-than-expected U.S. and China data, although the fiscal cliff remained a risk factor, the bank said.
Tuesday, November 27, 2012
Albania keeps rate steady, to keep policy stimulative
Albania's central bank kept its benchmark refinancing rate unchanged at 4.0 percent, saying monetary conditions were appropriate to ensure that inflation meets the bank's medium-term target and provides the necessary stimulus to support domestic demand.
The Bank of Albania, which has cut rates three times this year for a total reduction of 75 basis points, said it expects "to maintain the stimulative nature of monetary policy in the medium term."
"In the presence of a stable monetary environment, anchored inflation expectations, as well as a moderate influence of foreign prices and the exchange rate, inflation is expected to remain close to the Bank of Albania's target in the future," the central bank said in a statement.
Albania's inflation rate eased to 2.4 percent inflation in October from 2.6 percent in September due to lower food prices, which make up some 70 percent of the inflation measure.
The central bank said it expects inflationary pressures to remain contained due to moderate monetary growth rates, slow economic activity and lower world prices.
"Domestic demand still appears weak, constrained by the lack of fiscal stimulus and the inertia of consumption and private investment," the central bank said.
Albania's economy is expected to continue to expand but at a low level and below potential due to poor private consumption and investment.
Albania's Gross Domestic Product rose by 0.93 percent in the second quarter from the first, for an annual rate of 2.04 percent, up from an annual contraction of 0.2 percent in the first quarter.
Albania's central bank targets inflation of 3.0 percent, plus/minus 1 percentage point.
www.CentralBankNews.info
The Bank of Albania, which has cut rates three times this year for a total reduction of 75 basis points, said it expects "to maintain the stimulative nature of monetary policy in the medium term."
"In the presence of a stable monetary environment, anchored inflation expectations, as well as a moderate influence of foreign prices and the exchange rate, inflation is expected to remain close to the Bank of Albania's target in the future," the central bank said in a statement.
Albania's inflation rate eased to 2.4 percent inflation in October from 2.6 percent in September due to lower food prices, which make up some 70 percent of the inflation measure.
The central bank said it expects inflationary pressures to remain contained due to moderate monetary growth rates, slow economic activity and lower world prices.
"Domestic demand still appears weak, constrained by the lack of fiscal stimulus and the inertia of consumption and private investment," the central bank said.
Albania's economy is expected to continue to expand but at a low level and below potential due to poor private consumption and investment.
Albania's Gross Domestic Product rose by 0.93 percent in the second quarter from the first, for an annual rate of 2.04 percent, up from an annual contraction of 0.2 percent in the first quarter.
Albania's central bank targets inflation of 3.0 percent, plus/minus 1 percentage point.
www.CentralBankNews.info
Hungary to mull further rate cuts if inflation, risks low
Hungary’s central bank, which cut its base rate for the fourth time this year, will consider further rate cuts if inflation continues to fall and financial markets remain confident about the country.
Magyar Nemzeti Bank repeated last month's statement that it expects inflation to remain well above the bank’s target this year and 2013 but then decline as the disinflationary impact of weak demand dominates and the effect of one-off price level shocks subside.
The National Bank of Hungary expects inflation to meet its 3.0 percent target in 2014, but cautioned it is crucial that wage increases next year are consistent with productivity improvements so cost pressures can be eased and employment levels can be increased.
Inflation in Hungary eased in October to 6.0 percent from a year-high of 6.6 percent in September due to lower fuel prices and administered prices.
Earlier today the central bank cut its base rate by 25 basis points to 6.0 percent and has now cut the rate by 100 basis points this year.
“The short-term outlook for inflation improved, mostly as a result of favourable developments in non-core inflation items,” the bank said, adding that a sustained drop in Hungarian risk premia may also help the medium-term inflation outlook.
Hungary’s economy is in recession and the central bank said there was a “substantial margin of spare capacity” that would help buffer any cost shocks.
Magyar Nemzeti Bank repeated last month's statement that it expects inflation to remain well above the bank’s target this year and 2013 but then decline as the disinflationary impact of weak demand dominates and the effect of one-off price level shocks subside.
The National Bank of Hungary expects inflation to meet its 3.0 percent target in 2014, but cautioned it is crucial that wage increases next year are consistent with productivity improvements so cost pressures can be eased and employment levels can be increased.
Inflation in Hungary eased in October to 6.0 percent from a year-high of 6.6 percent in September due to lower fuel prices and administered prices.
Earlier today the central bank cut its base rate by 25 basis points to 6.0 percent and has now cut the rate by 100 basis points this year.
“The short-term outlook for inflation improved, mostly as a result of favourable developments in non-core inflation items,” the bank said, adding that a sustained drop in Hungarian risk premia may also help the medium-term inflation outlook.
Hungary’s economy is in recession and the central bank said there was a “substantial margin of spare capacity” that would help buffer any cost shocks.
Hungary cuts base rate by 25 bps to 6.0%
Hungary's central bank cut its base rate by 25 basis points to 6.00 percent, as widely expected, but gave no further details in its statement.
Magyar Nemzeti Bank, the National Bank of Hungary, has now cut its base rate by 100 basis points this year.
Hungary's Gross Domestic Product contracted by 0.2 percent in the third quarter from the second, the third monthly contraction in a row, for an annual decline of 1.5 percent, up from an annual shrinkage of 1.3 percent in the second quarter.
Inflation eased to 6.0 percent in October from a 2012 high of 6.6 percent in September, but still twice the bank's target of 3.0 percent.
www.CentralBankNews.info
Magyar Nemzeti Bank, the National Bank of Hungary, has now cut its base rate by 100 basis points this year.
Hungary's Gross Domestic Product contracted by 0.2 percent in the third quarter from the second, the third monthly contraction in a row, for an annual decline of 1.5 percent, up from an annual shrinkage of 1.3 percent in the second quarter.
Inflation eased to 6.0 percent in October from a 2012 high of 6.6 percent in September, but still twice the bank's target of 3.0 percent.
www.CentralBankNews.info
Central Bank News Link List - Nov 27, 2012: OECD cuts global economic forecasts over euro zone risks
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.)
- OECD cuts global economic forecasts over euro zone risks (Reuters)
- Two (Australia) interest rate cuts coming, says OECD (brisbane times)
- Greece wins easier debt terms as EU hails rescue formula (Bloomberg)
- China's PBOC chief search spurs focus on finance regulators (Bloomberg)
- Fed's Lockhart warns of unusual threats to financial system (Reuters)
- Polish December rate cut already decided, Glapinski says (Bloomberg)
- BOE King: Coupon transfer has no long term fiscal impact (MNI)
- BOE's Weale: Inflation above target for much of next two years (Dow Jones)
- OECD: Fed's policy appropriate; can do more if econ worsens (MNI)
- Norway's banks need to hold more capital-central bank (Reuters)
- Iceland c.bank gov says still risk to rates from wages (Reuters)
- London bankers bracing for leaner bonuses than New York (Bloomberg)
- www.CentralBankNews.info
Monday, November 26, 2012
Canada's Carney to become Bank of England governor
The U.K. government has appointed Mark Carney, the highly-regarded governor of the Bank of Canada (BOC), as the next governor of the Bank of England (BOE), surprising commentators that had put their money on Paul Tucker to replace Sir Mervyn King on July 1, 2013.
Tucker, deputy governor at the BOE, had topped the list of candidates to replace King, who retires after 10 years as governor, after Carney had said he would not be applying for the job.
“Mark Carney is the outstanding candidate to be Governor of the Bank of England and help steer Britain through these difficult economic times. He is quite simply the best, most experienced and most qualified person in the world to do the job," U.K. Chancellor of the Exchequer George Osborne said in a statement, adding Carney has indicated he intends to serve a five year term.
Carney has headed the BOC since February 2008 and is also chairman of the Financial Stability Board (FSB), which monitors and promotes global financial regulation. Carney is familiar with the United Kingdom, having a masters and doctorate in economics from Oxford University and worked for Goldman Sachs in its London, Tokyo, New York and Toronto offices.
As a Canadian, Carney is a subject of The Queen and the UK Treasury said he had indicated that he would apply for British citizenship. He is married to a British citizen.
Tucker, deputy governor at the BOE, had topped the list of candidates to replace King, who retires after 10 years as governor, after Carney had said he would not be applying for the job.
“Mark Carney is the outstanding candidate to be Governor of the Bank of England and help steer Britain through these difficult economic times. He is quite simply the best, most experienced and most qualified person in the world to do the job," U.K. Chancellor of the Exchequer George Osborne said in a statement, adding Carney has indicated he intends to serve a five year term.
Carney has headed the BOC since February 2008 and is also chairman of the Financial Stability Board (FSB), which monitors and promotes global financial regulation. Carney is familiar with the United Kingdom, having a masters and doctorate in economics from Oxford University and worked for Goldman Sachs in its London, Tokyo, New York and Toronto offices.
As a Canadian, Carney is a subject of The Queen and the UK Treasury said he had indicated that he would apply for British citizenship. He is married to a British citizen.
Israel holds rate, no inflation pressure, growth moderate
Israel's central bank left its policy interest rate steady at 2.0 percent, saying inflationary pressures were not visible and the economy is expected to continue to expand moderately in coming months.
The Bank of Israel (BOI), which last month cut its rates for the third time this year for a total reduction of 75 basis points, said "the level of economic risk from around the world remains high, and with it the concerns over negative effects on the local economy."
But data point to moderate economic improvement in U.S. and China in contrast to continued recession in Europe and a deterioration in Japan. Inflation worldwide continues to be low and commodity prices are expected to support the current level of inflation.
The BOI said Israel's Gross Domestic Product expanded by an annual 2.9 percent in the third quarter with private consumption up 3.5 percent and exports up 4.6 percent. But there was a decline of demand for consumer durables, machinery and equipment investment.
The Bank of Israel (BOI), which last month cut its rates for the third time this year for a total reduction of 75 basis points, said "the level of economic risk from around the world remains high, and with it the concerns over negative effects on the local economy."
But data point to moderate economic improvement in U.S. and China in contrast to continued recession in Europe and a deterioration in Japan. Inflation worldwide continues to be low and commodity prices are expected to support the current level of inflation.
The BOI said Israel's Gross Domestic Product expanded by an annual 2.9 percent in the third quarter with private consumption up 3.5 percent and exports up 4.6 percent. But there was a decline of demand for consumer durables, machinery and equipment investment.
Angola holds rate steady as inflation rises slightly
The central bank of Angola kept its base rate (BNA) unchanged at 10.25 percent, noting the inflation rate had ticked up slightly in October while credit to the economy expanded by a monthly 1.94 percent for an increase of 19.45 percent since the start of the year.
Banco Nacional de Angola has held its base rate steady all year and the inflation rate rose 0.91 percent in October from September for an annual rate of 9.76 percent, up from September's rate of 9.65 percent, the lowest level this year.
Reducing inflation to single digit levels has been an aim of the central bank for many years.
In its statement, the banks said the rise in inflation was due to higher prices of housing, water, and electricity gas & fuel, food, alcohol and tobacco.
Interest rates had remained stable throughout the month with the LUIBOR overnight at 5.56 percent while the average exchange rate of the kwanza against the U.S. dollar was 95.47 end-October compared with 95.42 at the end of September.
Local currency credit accounts for 56 percent of total credit to Angola's economy, the bank added.
www.CentralBankNews.info
Banco Nacional de Angola has held its base rate steady all year and the inflation rate rose 0.91 percent in October from September for an annual rate of 9.76 percent, up from September's rate of 9.65 percent, the lowest level this year.
Reducing inflation to single digit levels has been an aim of the central bank for many years.
In its statement, the banks said the rise in inflation was due to higher prices of housing, water, and electricity gas & fuel, food, alcohol and tobacco.
Interest rates had remained stable throughout the month with the LUIBOR overnight at 5.56 percent while the average exchange rate of the kwanza against the U.S. dollar was 95.47 end-October compared with 95.42 at the end of September.
Local currency credit accounts for 56 percent of total credit to Angola's economy, the bank added.
www.CentralBankNews.info
Central Bank News Link List - Nov 26, 2012: Macklem seen as probable Carney Bank of Canada successor
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.)
- Macklem seen as probable Carney Bank of Canada successor (Bloomberg)
- BOJ rift surfaces over easing as political debate heats up (Reuters)
- Analysts expect (Thai) central bank to keep policy (The Nation)
- Hungary set to lower rates further as recession trumps inflation (Bloomberg)
- Brazil Copom expected to hold steady at 7.25% Weds (MNI)
- Argentina bondholders seek fresh half on court ordered payments (Reuters)
- UK regulator fines UBS in rouge trader case (AP)
- South Korea government think-tank calls for more policy easing (CNBC/Reuters)
- Poland's Hausner: Expect rate cut in December (Dow Jones)
- BSP (Philippines) sets interest rates swap (manilla bulletin publishing)
- Overnight rates surge in Fed's Operation Twist (Bloomberg)
- www.CentralBankNews.info
Saturday, November 24, 2012
Monetary Policy Week in Review – Nov. 24, 2012: Three of six central banks ease as global uncertainty continues
Last week six central banks took
monetary policy decisions, with two cutting policy interest rates (Colombia and
Georgia) and the remaining four (Japan, Turkey, Nigeria and South Africa)
keeping rates unchanged.
Although Turkey kept is
benchmark rate unchanged, it placed itself in the easing camp by reducing the short-term
lending rate, further narrowing its interest rate corridor to 4.0 percentage
points.
So far this year, policy rates
have been cut four times more often than they have been raised by the 88
central banks followed by Central Bank News. Year-to-date, rates have been
reduced 113 times while they have been increased 28 times, demonstrating central banks' concern over growth prospects and the lack of an inflationary threat on a global scale.
The recurrent theme in central
banks’ statements last week was uncertainty about the global economy, primarily due to the
lack of political decisions to resolve the threat of the U.S. "fiscal cliff" and the euro area’s
debt crises, which is dragging down economic growth.
The two central banks that cut
rates, Georgia and Colombia, cited lower inflation that allowed them to help stimulate
economic activity. Nigeria, which held rates despite expectations for a cut,
cited high inflation as the reason for its decision.
South Africa’s central bank was
very downbeat, saying recent labor unrest had negatively affected the country’s
economic outlook and confidence, aggravating the impact of slow global growth.
The bank was now in the tough spot of trying to strike the right balance
between inflationary pressures and slowing growth.
LAST WEEK’S
(WEEK 47) MONETARY POLICY DECISIONS:
| COUNTRY | MSCI | NEW RATE | OLD RATE | 1 YEAR AGO |
| JAPAN | DM | 0.10% | 0.10% | 0.10% |
| TURKEY | EM | 5.75% | 5.75% | 5.75% |
| NIGERIA | FM | 12.00% | 12.00% | 12.00% |
| GEORGIA | 5.50% | 5.75% | 7.00% | |
| SOUTH AFRICA | EM | 5.00% | 5.00% | 5.50% |
| COLOMBIA | EM | 4.50% | 4.75% | 4.75% |
NEXT WEEK (WEEK
48) monetary policy committees at eight central banks are scheduled to meet,
including Angola, Israel, Hungary, Albania, Thailand, Brazil, Fiji and Mexico.
| COUNTRY | MSCI | DECISION | RATE | 1 YEAR AGO |
| ANGOLA | 26-Nov | 10.25% | 10.50% | |
| ISRAEL | DM | 26-Nov | 2.00% | 2.75% |
| HUNGARY | EM | 27-Nov | 6.25% | 6.50% |
| ALBANIA | 27-Nov | 4.00% | 5.00% | |
| THAILAND | EM | 28-Nov | 2.75% | 3.25% |
| BRAZIL | EM | 28-Nov | 7.25% | 11.00% |
| FIJI | 29-Nov | 0.50% | 0.50% | |
| MEXICO | EM | 30-Nov | 4.50% | 4.50% |
Friday, November 23, 2012
Colombia cuts rate 25 bps, growth slower than expected
Colombia's central bank cut its benchmark interest rate by 25 basis points to 4.5 percent, a surprise to financial markets that had expected rates to be held steady, saying economic growth was slowing "slightly more than expected."
Banco de la Republica Colombia has raised rates two times this year and cut rates three times with the intervention rate now 25 basis points below the level it started the year.
"After annual growth of 4.8 percent in the first half of 2012, recent indicators suggest that activity is moderating slightly more than expected," the central bank said in a statement, adding that the weak global economy and decline in domestic demand was reflected in lower exports and industrial output.
Colombia's Gross Domestic Product grew by 1.6 percent in the second quarter for an annual rate of 4.9 percent, up from 4.8 percent in the first but down from 6.1 percent in the fourth quarter.
The central bank said the range of forecast for this year are between 3.7-4.9 percent, with 4.3 percent the most likely.
Banco de la Republica Colombia has raised rates two times this year and cut rates three times with the intervention rate now 25 basis points below the level it started the year.
"After annual growth of 4.8 percent in the first half of 2012, recent indicators suggest that activity is moderating slightly more than expected," the central bank said in a statement, adding that the weak global economy and decline in domestic demand was reflected in lower exports and industrial output.
Colombia's Gross Domestic Product grew by 1.6 percent in the second quarter for an annual rate of 4.9 percent, up from 4.8 percent in the first but down from 6.1 percent in the fourth quarter.
The central bank said the range of forecast for this year are between 3.7-4.9 percent, with 4.3 percent the most likely.
Central Bank News Link List - Nov 23, 2012: BoE's Miles: Could have sought much bigger QE boost
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's Miles: Could have sought much bigger QE boost (Reuters)
- RPP member: (Polish) rates should be cut to record low (wbj)
- Mexico inflation slows, backing central bank rate freeze (Reuters)
- EU leaders name Mersch to ECB after gender row (AFP)
- Germany casts doubt on EU bank supervision deadline (Reuters)
- Cure for economic slumps seen in raising rates (Bloomberg)
- www.CentralBankNews.info
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