Trinidad & Tobago holds rate, economy still recovering

    Trinidad and Tobago's central bank held its benchmark repo rate steady at 2.75 percent, saying partial data on the non-energy sector in the third quarter indicates a mixed performance, suggesting "that the economy still remains on its path of slow but steady recovery."
    The Central Bank of Trinidad and Tobago, which cut its rate by 25 basis points in 2012, said planned maintenance by two major natural gas products and shutdowns in the downstream industry in September led to a contraction of just over 4 percent, year-on-year, in energy production in the third quarter. However, with most of the maintenance work completed, output will return to more normal levels in 2014.
    Trinidad & Tobago's Gross Domestic Product contracted by an annual 1.15 percent in the second quarter, down from an expansion of 0.66 percent in the first quarter. In 2012 the country's economy expanding by 0.2 percent after contracting by 2.6 percent in 2011. The IMF forecasts growth of 1.6 percent this year and 2.3 percent in 2014.

Colombia holds rate, confirms Q3, 2013 growth forecasts

    Colombia's central bank held its benchmark interest rate steady at 3.25 percent, as widely expected, and confirmed its forecast for economic growth this year of 3.5 percent to 4.5 percent and that inflation should return to the bank's target range as a shock to food supply is diluted.
    The Central Bank of Colombia, which has held rates steady since April after cutting by a combined 100 basis points in the first three months of the year, also confirmed its estimate for third quarter growth of between 3.8 percent and 5.4 percent.
    In the second quarter, Colombia's Gross Domestic Product rose by 2.2 percent from the first quarter for annual growth of 4.2 percent, up from 2.8 percent. In 2012 Colombia's economy expanded by 4.0 percent.
    "Interest rates remain at levels that stimulate aggregate spending in the economy," the central bank said.
    In its quarterly report from earlier this month, the central bank forecast 2014 growth of between 3 percent and 5 percent and third quarter growth of 3.8-4.5 percent, putting 2013 growth within reach of a forecast 4.0 percent despite a weak start to the year.
     The central bank's board also agreed on an inflation target of 3.0 percent, plus/minus 1 percentage point, for 2014, unchanged from this year.

Zambia holds rate, sees December inflation pressures

     Zambia's central bank held its policy rate steady at 9.75 percent, saying an expected increase in inflationary pressures in December are likely to be moderated by the central bank's tight policy stance.
    "Hence, after weighing the inflationary risks, the Committee decided to sustain the current relatively right monetary monetary policy stance and maintain the Bank of Zambia policy rate at 9.75%," the central bank said.
    Zambia's inflation rate rose slightly to 7.0 percent in November from 6.9 percent in October, above the central bank's 6.0 percent target for the year, but in line with the bank's expectations.
   The central bank raised its rate by a total of 50 basis points in June and July.
   Inflationary pressures are expected to emanate from the lagged effects of the recent depreciation of the kwacha's exchange rate coupled with higher seasonal demand for some consumer products as the holiday season approaches and a seasonal increase in the prices of maize grain and mealie meal, the Bank of Zambia said.
    Like many other emerging market currencies, the kwacha fell in late May through early July but then rebounded and rose until the end of October. It then dropped by 5 percent to 5.58 per U.S. dollar on Nov. 10 from late October. Earlier today it was trading at 5.50 to the dollar.
    Last week an official at the central bank said a drop in the kwacha to near its weakest levels in 4-1/2 years was temporary and it was set to rebound.
   Emmanuel Pamu, financial markets director at the central bank told Bloomberg that the kwacha would be in an equilibrium at a rate of 5.30 to 5.40 to the dollar.

    www.CentralBankNews.info

Central Bank News Link List - Nov 29, 2013: Draghi shares exchange-rate views with central bankers

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.

• Draghi shares exchange-rate views with central bankers (WSJ)
• U.K. banks must meet Basel rule five years ahead of schedule (Bloomberg)
• Senior Irish bank regulator Muldoon resigns in latest departure (Bloomberg)
• Key euribor rate rises as ECB dampens expectations of action (Reuters)
• China c.bank drafts rules on deposit insurance system-sources (Reuters)
• Norway's central bank seen ditching rate hike on weak growth (Reuters)
• Carney's housing alarm bell nudges BOE toward stimulus exit (Bloomberg)
• Banks to repay 7.2 billion euros of crises loans - ECB (Reuters)
• Philippine economy could hit growth targets (WSJ)
• Brazil's central bank says monetary policy at stake in bank suit (Bloomberg)
• Bank of England to take fresh look at securitisation market (Reuters)
• Bank of Canada seen raising rates in second quarter of 2015: Reuters poll
• BOJ has no plan to monetize debt via monetary policy: Kuroda (Reuters)
• Venezuela central bank denies transactions with Wall St (Reuters)
• Bank of Russia blames uncertainty over US, Europe for ruble volatility (WSJ)
• HSBC's King sees more focus on forward guidance as Fed tapers (Bloomberg)
• Austrian central bank top-ranked woman counsels ECB pause (Bloomberg)
• Somali government appoints interim central bank governor (Reuters)
• What the world needs now: Coordinated economic policy (WSJ/Capital)
• Insight: No quick exit from West's economic malaise (Reuters)
• www.CentralBankNews.info

Central Bank News Link List - Nov 28, 2013: Bank of England cuts mortgage support to avoid housing bubble

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.

• Bank of England cuts mortgage support to avoid housing bubble (Reuters)
• Philippine central bank sees higher CPI in Nov but policy still appropriate (Reuters)
• Ibovespa rises on sign central bank to curb higher rates (Bloomberg)
• Europe's banks face 280 bin euro capital shortfall in 2014 - PwC (Reuters)
• Former Fed chief Greenspan sees no bubble in Dow 16,000 (Bloomberg)
• Mexico rate cut unlikely as GDP gains, central banker says (Bloomberg)
• South Africa central bank doesn't expect abrupt halt to inflows (Bloomberg)
• Russia to miss 5-6% inflation target this year - central bank (RIA Novosti)
• Hungary's cbank chief sees more room for rate cut (Reuters)
• BoE's guidance has kept lid on rising market rates - economists (Reuters)
• Negative rate experiment in Denmark may stretch into 2015 (Bloomberg)
• Croatia's c.bank cuts reserve rate to 12 fro 13.5 pct to spur lending (Reuters)
• Polish fin min wants to introduce staggered rate setting panel (Dow Jones)
• African central banks turn hawkish, says Capital Economics (Barron's)
• Zimbabwe Reserve Bank chief's future shrouded in mystery (Africa Report)
• www.CentralBankNews.info

Tunisia holds rate, appeals for control of C/A, public deficit

    Tunisia's central bank held its key interest rate steady at 4.0 percent and appealed for political stability and security along with measures to control the current account deficit, public finances and thus avoid "runaway inflation."
    Although Tunisia's headline inflation rate was stable at 5.8 percent in October and September, the Central Bank of Tunisia said this should not obscure an acceleration of core inflation which rose to 6.9 percent in October from 6.8 percent the previous month.
    Tunisia's central bank last raised its rate by 25 basis points in March to control inflation.
    The central bank also said in a statement following its board meeting on Nov. 27 that a revision of economic growth estimates for 2013 to 3.0 percent from 3.6 percent now "remains somewhat optimistic since its achievement requires no less than a 3.7 percent growth over the fourth quarter of this year."
  Tunisia's Gross Domestic Product expanded by an annual 2.4 percent in the third quarter, down from 3.2 percent in the second quarter, due to a contraction in agriculture and the mining sector while manufacturing essentially stagnated.

Fiji holds rate steady, sees 2014 growth over 3 pct

    Fiji's central bank maintained its overnight policy rate (OPR) steady at 0.5 percent, saying a soft global economic climate means growth has to be driven by domestic forces and the current policy stance remains appropriate and complementary to the government's policy initiatives.
    The Reserve Bank of Fiji, which has maintained rates since December 2011, said consumption and investment activity remain buoyant, supported by adequate liquidity and low interest rates.
   “The growth forecast for 2014 is now expected to be higher than the 3.0 percent estimated prior to announcement of the 2014 National Budget and commended Government for the increased capital expenditure and the continuation of the structural reforms,” said the bank's governor, Barry Whiteside.
    In October the central bank revised upwards its forecast for growth this year to 3.6 percent, up from a forecast of 3.2 percent in August, and also raised its 2014 growth forecast to 3.0 percent from an earlier 2.5 percent. In 2012 Fiji's Gross Domestic Product grew by an estimated 2.2 percent.
    Higher government spending will boost imports and this will pose a downside risk to Fiji's balance of payments next year, but Whiteside added that foreign reserves are at record highs and expected to remain comfortable.

Albania cuts rate amid low inflation, fiscal tightening

    Albania's central bank cut its benchmark repurchase rate by another 25 basis points to 3.25 percent to help stimulate economic growth and meet the bank's inflation target amid fiscal tightening.
    The Bank of Albania, which has cut its rate by 75 basis points this year, said it expects inflationary pressures to remain weak due to low demand-side pressures as the Albanian economy continues to operate below its potential.
    "Economic growth its expected to remain weak and not generate inflationary pressures," the bank said after meeting of its supervisory council on Nov. 27.
    Albania's headline inflation rate was stable at 1.7 percent in October and September, below the central bank's target of end-year inflation of 3.0 percent, plus/minus one percentage point.
    Albania's Gross Domestic Product expanded by 1.0 percent in the second quarter from the first quarter for annual growth of 1.1 percent, down from 1.8 percent in the first quarter.
    The central bank said the government's fiscal stimulus faded significantly in the third quarter and high levels of public debt is limiting the ability of fiscal policy to support economic activity.

Brazil raises Selic rate 50 bps to 10%, no bias indicated

    Brazil's central bank raised its benchmark Selic rate by 50 basis points to 10.0 percent, as widely expected, and did not issue any guidance for the future direction of monetary policy.
    The Central Bank of Brazil has now raised rates six times in a row by a total of 275 basis points this year to contain inflation.
    "Continuing the adjustment of the basic interest rate process, which began in April 2013, the Committee decided unanimously to raise the Selic rate to 10.00% pa, without bias," the central bank's policy committee, known as Copom, said.
    Copom's statement omitted any reference to the policy decision contributing to reducing inflation and ensuring that this trend would persist into next year. In recent months this sentence has accompanied the statements announcing the rate rises.
    Economists had expected the central bank to raise its rate today and continue to raise rates next year to 10.50 percent, according to the central bank's survey of 100 analysts published this week. The next meeting by Copom is in January.

Ghana holds rate, inflation risks structural, no growth risk

    Ghana's central bank maintained its policy rate at 16.0 percent, saying the upside risks to inflation were mainly structural and may not need to be countered by higher interest rates while there are no significant risks to economic growth.
    The Bank of Ghana, which raised rates by 100 basis points in May, said the upside risks to inflation that had been identified earlier this year had crystalized in the form of pass-through of higher petroleum and electricity prices - following the removal of subsidies and higher utility tariffs - as well as fiscal and exchange rate pressures.
    The central bank said it expects headline inflation to breach it's target this year but inflation should track back to the target of 9.5 percent, plus/minus 2 percentage points, by the end of 2014 as fiscal measures in the 2014 budget should mitigate some of the pressures.
    Ghana's inflation rate  jumped to 13.1 percent in October from 11.9 percent in September, the highest rate in more than 3-1/2 years and continuing the trend of rising inflation from last year's average inflation rate of 9.2 percent and 8.7 percent in 2011. The International Monetary Fund has forecast 11.0 percent average inflation this year, declining to 9.8 percent in 2014.

Central banks net gold buyers for 11 consecutive months

  (Following article is written by Michael Lombardi of Profit Confidential for Central Bank News, which occasionally will carry articles by guest contributors if they are of interest to our readers.)

     

    By Michael Lombardi, for Profit Confidential

    According to the World Gold Council (WGC), demand for gold bullion in the third quarter was 869 tonnes. (Source: World Gold Council, November 14, 2013.) And in the quarter, central banks purchased 93 of those tones.

    Central banks have now been buyers of the precious metal for 11 consecutive quarters. Why have central banks been continuously buying more gold? My speculation is that they realize the fiat currency will eventually be problematic, with so much of it being created out of thin air these days.

    Consumer demand for gold bullion is also robust. In China, in the third quarter, consumer demand for gold bullion accounted for 210 tonnes—18% higher than the same period a year ago. In India, consumers’ appetite for the precious metal declined 32% in the third quarter from the previous quarter, as the government and central bank worked together to curb consumer demand for gold bullion. But looking at the first nine months of 2013, gold bullion demand in India was 19% higher than the previous year.

Central Bank News Link List - Nov 27, 2013: Brazil likely to raise base interest rate, end single-digit era

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 likely to raise base interest rate, end single-digit era (Reuters)
• ECB says financial system stress has fallen to pre-crises levels (Reuters)
• IMF sees Canada rate hikes starting early 2015 (Dow Jones)
• Fed reveals new concerns about long-term U.S. slowdown (Bloomberg)
• S. Korea fin min plays down need for interest rate cut (Reuters)
• Analysis: Surfing central banks in a benign "QE trap' (Reuters)
• BI dismisses concern over sharp decline in Indonesia's rupiah (Jakarta Post) 
• BOE McCafferty: MPC doesn't see hike anything like near future (MNI)
• Israeli tax axed for growth as central bank holds fire (Bloomberg)
• Hungary funding plan to dwarf rate policy, Morgan Stanley (Bloomberg)
• Somalia: president appoints new central bank governor (Garowe Online) 
• Slovaks to impose bank capital buffer, no systemic risk charge (Reuters)
• www.CentralBankNews.info