Colombia's central bank held its benchmark interest rate steady at 3.25 percent, as expected, and will continue to buy foreign exchange worth at least $2.5 billion from June to September to keep the peso from rising.
The Central Bank of Colombia said the peso, like other currencies in Latin America, has depreciated against the U.S. dollar, either due to lower international prices of basic goods or because investors are speculating that the U.S. Federal Reserve will be being to reduce its asset purchase program.
"The interventions of the Central Bank in the local exchange market, as well as measures taken by the government, have reinforced the trend towards depreciation of the peso," the central bank said.
In January Colombia's central bank said it would spend at least of $3 billion between February and May, with daily purchases of not less than $30 million, to buy foreign exchange to hold down the peso.
The peso has eased some 7 percent against the U.S. dollar this year and continued to drop after news the central bank would continue to intervene, helping reverse a 10 percent rise in 2012.
The central bank said second quarter economic growth should improve from the first quarter - estimated at less than 3.0 percent - with consumer confidence improving significantly as previous rate cuts are being transmitted to lower nominal interest rates which has stopped the fall in credit.
Friday, May 31, 2013
Zambia raises rate 25 bps on risks to 2013 inflation target
Zambia's central bank raised its policy rate by 25 basis points to 9.5 percent, saying inflationary pressures "would be threat to the achievement of end-year inflation target of 6.0%."
The Bank of Zambia, which raised rates by 25 basis points in 2012, said in April that it expected inflationary pressures to continue to moderate in the month of April.
Inflation rose to 7.0 percent in April from 6.5 percent in March and the central bank said it was anticipating upward risks to inflation in June due to recent increases in the pump price of fuel coupled with the lagged effects of the recent exchange rate depreciation.
These pressures will be moderated by the relative stable prices of food due to a positive food balance as indicated in recent crop forecast surveys, the bank said.
Zambia's average inflation rate in 2012 was 6.6 percent, according to the International Monetary Fund, which forecasts a decline to 6.5 percent this year.
www.CentralBankNews.info
The Bank of Zambia, which raised rates by 25 basis points in 2012, said in April that it expected inflationary pressures to continue to moderate in the month of April.
Inflation rose to 7.0 percent in April from 6.5 percent in March and the central bank said it was anticipating upward risks to inflation in June due to recent increases in the pump price of fuel coupled with the lagged effects of the recent exchange rate depreciation.
These pressures will be moderated by the relative stable prices of food due to a positive food balance as indicated in recent crop forecast surveys, the bank said.
Zambia's average inflation rate in 2012 was 6.6 percent, according to the International Monetary Fund, which forecasts a decline to 6.5 percent this year.
www.CentralBankNews.info
Fiji holds rate steady, growth still on track to hit forecast
Fiji's central bank held its benchmark Overnight Policy Rate (OPR) steady at 0.5 percent as domestic economic activity remained mixed and inflation tumbled to its lowest level since May 2009.
The Reserve Bank of Fiji, which has maintained an accommodative policy stance and unchanged rates since December 2011, said the economy remains on target to reach a projected 2.7 percent growth in 2013. The International Monetary Fund put Fiji's 2012 growth at 2.1 percent.
Fiji's inflation rate fell to 1.0 percent in April from 3.3 percent in March. Separately, the central bank governor was quoted as saying in local media that inflationary pressures were expected to remain subdued and inflation to settle around 3.0 percent by year-end.
Consumption continues to trend upward, financed by strong growth in private credit and higher inward remittances, and new bank loans for investment purposes more than doubled to $39.5 million in the year to April, underpinned by loans to the building and construction sector.
However, gold production and visitor arrivals were weak, with annual gold production down by 41 percent in the year to March due to the low quality of ore, and in January visitor arrivals fell 7.9 percent due to the impact of Cyclone Evan, the bank said in its latest economic review.
The Reserve Bank of Fiji, which has maintained an accommodative policy stance and unchanged rates since December 2011, said the economy remains on target to reach a projected 2.7 percent growth in 2013. The International Monetary Fund put Fiji's 2012 growth at 2.1 percent.
Fiji's inflation rate fell to 1.0 percent in April from 3.3 percent in March. Separately, the central bank governor was quoted as saying in local media that inflationary pressures were expected to remain subdued and inflation to settle around 3.0 percent by year-end.
Consumption continues to trend upward, financed by strong growth in private credit and higher inward remittances, and new bank loans for investment purposes more than doubled to $39.5 million in the year to April, underpinned by loans to the building and construction sector.
However, gold production and visitor arrivals were weak, with annual gold production down by 41 percent in the year to March due to the low quality of ore, and in January visitor arrivals fell 7.9 percent due to the impact of Cyclone Evan, the bank said in its latest economic review.
Central Bank News Link List - May 31, 2013: Brazil's central bank in 'in a process' of combating inflation - report
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's central bank in 'in a process' of combating inflation - report (Dow Jones)
- IMF deputy chief expresses hope for Japan's economic growth strategy (Kyodo)
- Bank of Korea governor fears Fed tightening (WSJ)
- Hungary central bank mull signal on criteria for end of easing (Bloomberg)
- Fed off'l calls for broadening stress-tests, enhancing fin info (MNI)
- Swedish banks need to double mortgage risk weights, IMF says (Bloomberg)
- Bank of Russia head says Ulyukayev hasn't filed resignation (Dow Jones)
- www.CentralBankNews.info
Thursday, May 30, 2013
Angola holds rate steady at 10%, inflation drops further
Angola's central bank held its main policy rate steady at 10.0 percent as inflation continued to drop and the exchange rate remained stable.
The National Bank of Angola (BNA), which cut its rate by 25 basis points in January, said the monthly inflation rate in April was 0.6 percent, down from 0.66 percent in March, for an annual rate of 9.0 percent, down from 9.1 percent.
The BNA has for many years strived for an inflation rate below 10 percent and since August 2012 inflation has remained below that level.
The central bank also said credit to the economy rose by 0.18 percent in April and the average interest rate on credit of 181 days in local currency rose to 12.53 percent for retailers and declined to 13.7 percent for the corporate sector.
The average exchange rate for the kwanza against the U.S. dollar was 96.045 at the end of April compared with 95.98 at the end of March. During April the central bank sold US $1,980 million to the market for a total of $6,232 million in the first four months.
In 2012 Angola's economy grew by 7.4 percent and the International Monetary Fund projects growth of 6.2 percent this year.
www.CentralBankNews.info
Moldova holds key rates steady, base rate at 3.5%
Moldova's central bank maintained its basic rate at 3.5 percent along with its 1.5 percent rate on overnight deposits and 6.5 percent rate on overnight credits.
The National Bank of Moldova (NBM) did not issue any statement in connection with the decision by its council to keep rates steady.
Moldova's central bank last changed rates on April 25 when it cut its rates by 100 basis points. The central bank targets inflation of 5.0 percent, plus/minus 1.5 percentage points.
Moldova's inflation rate eased to 4.5 percent in April from 5.4 percent the previous month and down from an average of 4.7 percent in 2012. The International Monetary Fund forecasts 2013 inflation at 4.6 percent.
Moldova's Gross Domestic Product grew by 0.91 percent in the fourth quarter of 2012 from the third quarter for an annual contraction of 2.5 percent, a sharper decline than the third quarters's 0.2 percent fall.
Last year Moldova's economy contracted by 0.8 percent due to severe drought and reduced demand for its products by its main trading partners, Romania and Russia.
Moldova is one of the poorest countries in Europe, located between Romania and the Ukraine.
In January the NBM governor forecast that Moldova's economy should expand by 3 percent this year and 4 percent in 2014.
www.CentralBankNews.info
The National Bank of Moldova (NBM) did not issue any statement in connection with the decision by its council to keep rates steady.
Moldova's central bank last changed rates on April 25 when it cut its rates by 100 basis points. The central bank targets inflation of 5.0 percent, plus/minus 1.5 percentage points.
Moldova's inflation rate eased to 4.5 percent in April from 5.4 percent the previous month and down from an average of 4.7 percent in 2012. The International Monetary Fund forecasts 2013 inflation at 4.6 percent.
Moldova's Gross Domestic Product grew by 0.91 percent in the fourth quarter of 2012 from the third quarter for an annual contraction of 2.5 percent, a sharper decline than the third quarters's 0.2 percent fall.
Last year Moldova's economy contracted by 0.8 percent due to severe drought and reduced demand for its products by its main trading partners, Romania and Russia.
Moldova is one of the poorest countries in Europe, located between Romania and the Ukraine.
In January the NBM governor forecast that Moldova's economy should expand by 3 percent this year and 4 percent in 2014.
www.CentralBankNews.info
Central Bank News Link List - May 30, 2013: Wheeler says RBNZ ready to weaken kiwi as resolve challenged
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.
- Wheeler says RBNZ ready to weaken kiwi as resolve challenged (Bloomberg)
- BOJ to conduct more bond purchase operations to stem volatility (Bloomberg)
- Thai PM says central bank may impose added baht measures (Reuters)
- Softer Chile growth, inflation would have rate implications-cenbank (Reuters)
- Next U.S. Fed moves source of concern - Chile central bank (WSJ)
- RBA rate-cut bets pared as miners plan to boost investment (Bloomberg)
- BoE's King gets high rating but no economic stimulus as leaving gift (Reuters)
- Serbia central bank sells euros first time in 2013 on dinar drop (Bloomberg)
- Portugal central banker says banks ready to fund recovery (Reuters)
- Fischer adviser says recent rate cuts changed shekel path (Bloomberg)
- Negative rates no threat to bank health, Danish FSA says (Bloomberg)
- European Central Bank turns 15 years old (AFP)
- www.CentralBankNews.info
Wednesday, May 29, 2013
Brazil raises rate 50 bps to bring down inflation
Brazil's central bank raised its benchmark Selic rate by 50 basis points to 8.0 percent to help bring down inflation and "ensure that this trend will continue next year."
In a brief statement, the Central Bank of Brazil said its policy committee, known as Copom, had agreed on the rate rise unanimously and it did not issue a bias about the future trend of policy.
It is the second consecutive rate rise by Brazil's central bank following a 25 basis point rise in April, bringing this year's total rate increase to 75 basis points. In 2012 the central bank cut rates by 375 basis points in response to declining economic growth before freezing rates from November through March.
Today's rate rise was largely expected and follows recent warnings by the central bank's governor that he would do "what is needed, in a timely manner, to ensure inflation declines."
Brazil's inflation rate eased to 6.46 percent in the rolling one-month period through May 15 from 6.49 percent in April, close to the upper limit of the central bank's target range of 4.5 percent, plus/minus two percentage points. It was first decline since inflation started to accelerate in July 2012.
In a brief statement, the Central Bank of Brazil said its policy committee, known as Copom, had agreed on the rate rise unanimously and it did not issue a bias about the future trend of policy.
It is the second consecutive rate rise by Brazil's central bank following a 25 basis point rise in April, bringing this year's total rate increase to 75 basis points. In 2012 the central bank cut rates by 375 basis points in response to declining economic growth before freezing rates from November through March.
Today's rate rise was largely expected and follows recent warnings by the central bank's governor that he would do "what is needed, in a timely manner, to ensure inflation declines."
Brazil's inflation rate eased to 6.46 percent in the rolling one-month period through May 15 from 6.49 percent in April, close to the upper limit of the central bank's target range of 4.5 percent, plus/minus two percentage points. It was first decline since inflation started to accelerate in July 2012.
Central Bank News Link List - May 29, 2013: U.S. interest rates could spike when Fed slows bond buying - OECD
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.
- U.S. interest rates could spike when Fed slows bond buying -OECD (Reuters)
- Risk of bank failures is rising in Europe, E.C.B. warns (New York Times)
- Fed's Rosengren: Tapering may come in few months (MarketWatch)
- BOJ'S bond turmoil back-up plan sees tweaks, no policy change (Reuters)
- Euro zone private loans contract, pressuring ECB to act (Reuters)
- Brazil set to hike rates again (Reuters)
- S Korea finance minister warns of unintended impact of Japan's policy (WSJ)
- Abe adviser tells S.Korea to cope with yen not to blame Japan (Bloomberg)
- SNB may need to raise rates to cool housing market: OECD (Reuters)
- Hungarian central bank expands funding plan to boost growth (Bloomberg)
- Czech euro entry in doubt before 2019, central bank chief says (Bloomberg)
- NZ central bank likely use new tools, followed by rate hikes, NZIER says (sharechat)
- Pimco says Australian interest rates to fall (WSJ)
- BOE's Bean says monetary policy can be backstop against excesses (Bloomberg)
- Kenya's central bank intervenes to prop up shilling (bdlive)
- www.CentralBankNews.info
Canada holds rate, sees stimulus in place for some time
The Bank of Canada (BOC) maintained its target for the overnight rate at 1.0 percent, as expected, and said "the considerable monetary stimulus currently in place will likely remain appropriate for a period of time after which some modest withdrawal will likely be required" due to continued economic slack, a muted outlook for inflation and a continued improvement in household imbalances.
The BOC's forward rate guidance, the last one issued by Governor Mark Carney who will be taking over as Bank of England governor on July 1, is exactly the same as in April.
The BOC said Canada's first quarter economic growth is expected to be stronger than it had projected in April, but growth for the full year is still expected to remain broadly in line wit its forecast. Official data for first quarter Gross Domestic Product will be released on Friday.
In its April monetary policy report, the BOC cut its 2013 growth forecast to 1.5 percent from an earlier forecast of 2.0 percent, and forecast 2014 growth of 2.8 percent.
Consumer spending is forecast to grow at a moderate pace, business investment should grow solidly while residential investment should decline further from historically high levels, the BOC said.
"Growth in total household credit is slowing and the bank continues to expect that the household debt-to-income ratio will stabilize near current levels," the BOC said.
The BOC's forward rate guidance, the last one issued by Governor Mark Carney who will be taking over as Bank of England governor on July 1, is exactly the same as in April.
The BOC said Canada's first quarter economic growth is expected to be stronger than it had projected in April, but growth for the full year is still expected to remain broadly in line wit its forecast. Official data for first quarter Gross Domestic Product will be released on Friday.
In its April monetary policy report, the BOC cut its 2013 growth forecast to 1.5 percent from an earlier forecast of 2.0 percent, and forecast 2014 growth of 2.8 percent.
Consumer spending is forecast to grow at a moderate pace, business investment should grow solidly while residential investment should decline further from historically high levels, the BOC said.
"Growth in total household credit is slowing and the bank continues to expect that the household debt-to-income ratio will stabilize near current levels," the BOC said.
Tunisia holds rate steady to help stimulate exports
Tunisia's central bank held its key interest rate steady at 4.0 percent to help create an environment that can stimulate economic activity, in particular the export sector.
The Central Bank of Tunisia, which raised its rate by 25 basis points in March, said growth estimates for the first quarter showed annual growth of 2.7 percent, down from 4.0 percent in the fourth quarter of 2012, below the planned 4.0 percent growth for 2013.
In 2012 Tunisia's Gross Domestic Product expanded by 3.6 percent, reversing a 1.9 percent contraction in 2011 when the economy suffered from political upheaval, known as the Arab Spring that began in Tunisia in December 2010.
The decline in first quarter growth was due to lower output from agriculture, fishing and non-manufacturing such as mining, while manufacturing, transport and telecommunications showed a positive trend. Tourism, however, continues its decline since the beginning of the year.
The dinar's exchange rate "has faced some tensions" since early May, falling 4.1 percent against the euro and 6.1 percent against the U.S. dollar by mid-May due to demand from some firms for foreign exchange for import settlements or profit transfer, the central bank said in a statement after a meeting of its executive board on May 27.
The Central Bank of Tunisia, which raised its rate by 25 basis points in March, said growth estimates for the first quarter showed annual growth of 2.7 percent, down from 4.0 percent in the fourth quarter of 2012, below the planned 4.0 percent growth for 2013.
In 2012 Tunisia's Gross Domestic Product expanded by 3.6 percent, reversing a 1.9 percent contraction in 2011 when the economy suffered from political upheaval, known as the Arab Spring that began in Tunisia in December 2010.
The decline in first quarter growth was due to lower output from agriculture, fishing and non-manufacturing such as mining, while manufacturing, transport and telecommunications showed a positive trend. Tourism, however, continues its decline since the beginning of the year.
The dinar's exchange rate "has faced some tensions" since early May, falling 4.1 percent against the euro and 6.1 percent against the U.S. dollar by mid-May due to demand from some firms for foreign exchange for import settlements or profit transfer, the central bank said in a statement after a meeting of its executive board on May 27.
Thailand cuts rate 25 bps, says ready to take further action
Thailand's central bank cut its policy rate by 25 basis points to 2.50 percent due to continued concern over financial stability and said it was closely monitoring economic developments, financial stability risks and capital flows and "stands ready to take appropriate action as warranted."
The Bank of Thailand (BOT), on the front lines of the currency wars, said downside economic risks had increased from lower-than-expected growth in the first quarter and "as inflation remains well within the target, monetary policy has room to further cushion against downside risk to domestic demand."
Thailand's Gross Domestic Product contracted by 2.2 percent in the first quarter from the fourth for annual growth of 5.3 percent, sharply down from the fourth quarter's 19.1 percent expansion when growth was boosted by fiscal stimulus measures.
The BOT's rate cut was largely expected and follows a recent statement by the bank's governor that monetary policy could be eased if the economy was losing momentum. On Monday Thailand's finance minister said he hoped the BOT would cut the policy rate by more than 25 basis points.
The rate cut signals a sharp worsening in the BOT's outlook since its last regularly scheduled policy meeting on April 3 when it said inflationary pressures warranted monitoring though it was also concerned that a volatile exchange rate and capital flows could pose a risk to financial stability.
The Bank of Thailand (BOT), on the front lines of the currency wars, said downside economic risks had increased from lower-than-expected growth in the first quarter and "as inflation remains well within the target, monetary policy has room to further cushion against downside risk to domestic demand."
Thailand's Gross Domestic Product contracted by 2.2 percent in the first quarter from the fourth for annual growth of 5.3 percent, sharply down from the fourth quarter's 19.1 percent expansion when growth was boosted by fiscal stimulus measures.
The BOT's rate cut was largely expected and follows a recent statement by the bank's governor that monetary policy could be eased if the economy was losing momentum. On Monday Thailand's finance minister said he hoped the BOT would cut the policy rate by more than 25 basis points.
The rate cut signals a sharp worsening in the BOT's outlook since its last regularly scheduled policy meeting on April 3 when it said inflationary pressures warranted monitoring though it was also concerned that a volatile exchange rate and capital flows could pose a risk to financial stability.
Tuesday, May 28, 2013
Hungary to consider further rate cuts if inflation on target
Hungary's central bank, which cut its rate for the 10th time in a row to 4.50 percent, said it would consider cutting rates further if the "medium-term outlook for inflation remains in line with the Bank's 3 per cent target and the improvement in financial market sentiment is sustained."
The forward guidance by the National Bank of Hungary has been similar for many months, indicating that the bank is likely to continue the cycle of monetary easing that started in August 2012.
The contrast between benign financial markets and the weak outlook for global growth continues to pose a risk and this call for maintaining a cautious approach to policy, the central bank said.
Hungary's central bank has now cut rates by 250 basis points since August last year and by 125 basis points this year alone.
The central bank sounded a slightly optimistic tone about the outlook, saying Hungary's economy may recover from recession in the first half of 2013 due to a reversal of "adverse one-off shocks" at the end of last year though a sustained pick-up in growth is first likely from the end of this year when demand from export markets improves.
"In the council's judgement, the incoming economic data suggest that weak demand continues to exert a strong disinflationary impact on prices, and therefore companies have limited ability to pass on higher production costs into prices, while they are making stronger adjustments through the labor market," the central bank said in a statement after a meeting of its council.
The forward guidance by the National Bank of Hungary has been similar for many months, indicating that the bank is likely to continue the cycle of monetary easing that started in August 2012.
The contrast between benign financial markets and the weak outlook for global growth continues to pose a risk and this call for maintaining a cautious approach to policy, the central bank said.
Hungary's central bank has now cut rates by 250 basis points since August last year and by 125 basis points this year alone.
The central bank sounded a slightly optimistic tone about the outlook, saying Hungary's economy may recover from recession in the first half of 2013 due to a reversal of "adverse one-off shocks" at the end of last year though a sustained pick-up in growth is first likely from the end of this year when demand from export markets improves.
"In the council's judgement, the incoming economic data suggest that weak demand continues to exert a strong disinflationary impact on prices, and therefore companies have limited ability to pass on higher production costs into prices, while they are making stronger adjustments through the labor market," the central bank said in a statement after a meeting of its council.
Central Bank News Link List - May 28, 2013: Thailand wrestles with currency woes
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.
- Thailand wrestles with currency woes (WSJ)
- BoJ's Miyao: Policy easing will put downward pressure on interest rates (RTT)
- Noyer says negative rates 'technically very delicate': interview (Bloomberg)
- Fed says U.S. economy expanding at moderate pace (Dow Jones)
- European lenders draw down central-bank reserves (WSJ)
- ECB's Nowotny says better to revive bank lending than cut rates (Reuters)
- Carney's final stamp on monetary policy 'will be essentially status quo' (Financial Post)
- (Taiwan) central bank will not cut rats now: analysts (Taipei Times)
- Qatar central bank governor sees time when dollar peg may be changed (Reuters)
- CBN (Nigeria) threatens to raise CRR on elevated spending (This Day)
- (India) central bank may switch to reverse repo if rains are normal (live mint)
- (Pakistan) central bank likely to leave interest rate unchanged (Tribune)
- Derivatives traders targeted in Iceland currency experiment (Bloomberg)
- www.CentralBankNews.info
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