Australia's central bank held its benchmark cash rate steady at 2.50 percent, as expected, and reiterated that "the most prudent course is likely to be a period of stability in interest rates."
The Reserve Bank of Australia (RBA), which has maintained its rate since August 2013, said continued accommodative monetary policy should support demand and help economic growth strengthen over time while inflation is expected to remain in line with the bank's 2 -3 percent target.
The RBA's guidance that rates are likely to remain unchanged for some time was the same as it gave in February and earlier this month and its statement today also largely mirrored last month's view of the prospects for Australia's economy.
The exchange rate of the Australian dollar - known as the Aussie - is still considered "high by historical standards," and the RBA voiced concern over the recent rise in the exchange rate following a drop over in the last year.
"The decline in the exchange rate from its highs a year ago will assist in achieving balanced growth in the economy, but less so than previously as a result of the rise over the past few months," the RBA quoted its governor, Glenn Stevens as saying.
The Aussie weakened sharply from May
through August last year, falling from around 1.05 to the U.S. dollar to 0.89 by
August 30. It then gained strength through October before again falling
to a low of below 0.87 to the dollar in late January this year.
But in the last
two months it has started appreciating again, trading at 0.92 to the dollar
earlier today.
Monday, March 31, 2014
Central Bank News Link List - Mar 31, 2014 - ECB’s Weidmann says euro zone not in deflationary cycle
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.
- ECB’s Weidmann says euro zone not in deflationary cycle (Reuters)
- RBI likely to keep rates unchanged on April 1 (Times of India)
- ECB might yet adopt QE at next meeting, Capital Economics says (IFA magazine)
- Brazil to raise rates for longer as inflation drifts higher: Reuters poll (Reuters)
- Dollar reserve role secure but set to shrink – BIS (Reuters)
- Argentine central bank close to $1 billion loan, report says (Bloomberg)
- Peru central bank lowers reserve requirements 50 bps (Reuters)
- German fin min expects ECB rates to rise – Der Spiegel (Reuters)
- Bank of Israel raises equity investment in forex reserves (Reuters)
- IMF calls for higher Pakistan rates if state asset sales delayed (Bloomberg)
- Chile central bank to cut 2014 forecast, Vergara says (Bloomberg)
- BSP enters ‘tightening cycle’ with no negative impact seen (Business Mirror)
- Swedish central banker says household debt still an issue (Reuters)
Fiji holds rate on comfortable inflation, reserves outlook
Fiji's central bank maintained its Overnight Policy Rate at 0.5 percent, steady since November 2011, saying the current policy stance "was appropriate as the outlook for foreign reserves and inflation is comfortable."
Barry Whiteside, governor of the Reserve Bank of Fiji, added in a statement issued today after a monthly board on meeting on March 28 that the accommodative policy stance would be re-aligned if there are challenges to the bank's twin core objectives of foreign reserves and inflation.
Inflation in Fiji fell to 0.2 percent in February, the lowest since April 2009, from 2.3 percent in January. The central bank attributed to drop in inflation to free primary and secondary education that was announced in the 2014 national budget.
Fiji's foreign reserves were estimated at US$1.705 billion as of March 28, enough for 4.5 months of goods, and down from $1.763 billion as of Jan. 30.
www.CentralBankNews.info
Barry Whiteside, governor of the Reserve Bank of Fiji, added in a statement issued today after a monthly board on meeting on March 28 that the accommodative policy stance would be re-aligned if there are challenges to the bank's twin core objectives of foreign reserves and inflation.
Inflation in Fiji fell to 0.2 percent in February, the lowest since April 2009, from 2.3 percent in January. The central bank attributed to drop in inflation to free primary and secondary education that was announced in the 2014 national budget.
Fiji's foreign reserves were estimated at US$1.705 billion as of March 28, enough for 4.5 months of goods, and down from $1.763 billion as of Jan. 30.
www.CentralBankNews.info
Sunday, March 30, 2014
Monetary Policy Week in Review – Mar 24-28, 2014: Zambia raises as global trend shifts toward tightening
Seventeen central banks took policy decisions last week, with Hungary wrapping up its easing cycle, Zambia raising its rate, and the Philippines and Nigeria raising reserve requirements, underlining the shift toward tightening in global monetary policy.
The transition from five years of ultra-easy global monetary policy is spearheaded by the U.S. Federal Reserve which began unwinding its asset purchases in January. This has helped trigger 11 rate rises so far this year, including those by central banks in Turkey, South Africa, India, Ghana and Zambia in an effort to protect their currencies and retain foreign investment
While there is still a lingering debate over what Fed Chair Janet Yellen really meant to signal on March 19, other central banks and financial markets have taken her words - and those of other members of the Federal Open Market Committee - to heart and expect the Fed to raise rates earlier than expected.
In their statements last week the Bank of Israel noted that “the interest rate path expected by FOMC members increased compared with the previous meeting,” the South African Reserve Bank (SARB) said “financial markets now believe that the first interest rate increases may occur earlier in 2015 than previously expected,” and the Central Bank of Trinidad and Tobago said the Fed gave guidance that “policy interest rates could increase even faster than initially anticipated.”
The shift in the direction of global capital away from emerging and frontier markets to advanced economies has gone through several bouts of volatility since May last year and central banks are eager to avoid fanning the flames and cause any sudden shift in risk sentiment.
But as William Dudley, president of the New York Fed, said last week, emerging markets are much better positioned than in the past “to weather those times in the cycle when the external environment turns from welcoming to wary” due to a raft of reforms and changes, including more coherent monetary policy frameworks, the absence of fixed exchange rates, larger foreign exchange reserves, moderate debt and stronger banking systems.
South Africa, Nigeria and the Philippines’ central banks illustrate Dudley’s point. Most emerging market central banks are keenly aware of the challenges they are facing from the well-publicized shift in Fed policy and are responding in a disciplined and predictable manner.
Last week SARB said it remains in a tightening cycle but added that this doesn’t mean rates have to be changed at every meeting. SARB maintained its rate after raising it by 50 basis points in January in response to capital outflows and a plunge in the rand.
The recent improvement in global sentiment towards emerging markets had boosted the rand and thus improved the inflationary outlook, giving the central bank breathing space as it seeks to solve the dilemma of sluggish growth and inflationary pressures.
Like SARB, the Central Bank of Nigeria (CBN) also maintained its policy rate, but tightened policy by raising the cash reserve requirement on private sector deposits – in January it had raised the CRR on public sector deposits – saying the need to safeguard stability “required firm and bold measures.”
"Thus, prudent monetary stance would also facilitate better reserve and exchange rate management in an environment where Fed tapering increases pressure on emerging economies’ financial markets," CBN said, showing a steady hand amid a challenging international and domestic environment.
Bangko Sentral ng Pilipinas (BSP) also kept its policy rate steady but raised the reserve requirement to curb liquidity in a move that was signaled by the central bank’s governor last week after he said an early and gradual adjustment of monetary policy rather than discreet movements would be less disruptive to businesses.
The Philippine central bank added that it would “consider further adjustments in its policy tools to safeguard price and financial stability" and "buoyant domestic growth prospects allow some scope for a measured adjustment in the BSP's policy instruments amid the ongoing normalization of monetary policy overseas."
The annexation of Crimea by Russia from Ukraine added a new dimension to the global risk spectrum, but the National Bank of Georgia responded in a calm and measured manner.
The central bank of Georgia – on the eastern border of the Black Sea in the Caucasus region – said it still believed that monetary stimulus should be withdrawn but put off any rate rise, citing the potential threat from geopolitical factors and uncertainty that could undermine investors’ mood, demand for its exports and remittances from workers abroad.
Through the first 13 weeks of this year, rates have been raised 11 times, or 9 percent of this year’s 125 policy decisions by the 90 central banks followed by Central Bank News, down from 10 percent at the end of February.
But the Global Monetary Policy Rate (GMPR) – the average policy rate – rose to 5.56 percent this week from 5.53 percent at the end of January, helped by Zambia’s 175 basis-point rate rise.
Rates have been cut 15 times so far this year, or 12 percent of this year’s policy decisions, down from 14 percent at the end of February, as central banks still seek to shore up growth while inflationary pressures worldwide are kept at bay from sluggish global demand.
The transition from five years of ultra-easy global monetary policy is spearheaded by the U.S. Federal Reserve which began unwinding its asset purchases in January. This has helped trigger 11 rate rises so far this year, including those by central banks in Turkey, South Africa, India, Ghana and Zambia in an effort to protect their currencies and retain foreign investment
While there is still a lingering debate over what Fed Chair Janet Yellen really meant to signal on March 19, other central banks and financial markets have taken her words - and those of other members of the Federal Open Market Committee - to heart and expect the Fed to raise rates earlier than expected.
In their statements last week the Bank of Israel noted that “the interest rate path expected by FOMC members increased compared with the previous meeting,” the South African Reserve Bank (SARB) said “financial markets now believe that the first interest rate increases may occur earlier in 2015 than previously expected,” and the Central Bank of Trinidad and Tobago said the Fed gave guidance that “policy interest rates could increase even faster than initially anticipated.”
The shift in the direction of global capital away from emerging and frontier markets to advanced economies has gone through several bouts of volatility since May last year and central banks are eager to avoid fanning the flames and cause any sudden shift in risk sentiment.
But as William Dudley, president of the New York Fed, said last week, emerging markets are much better positioned than in the past “to weather those times in the cycle when the external environment turns from welcoming to wary” due to a raft of reforms and changes, including more coherent monetary policy frameworks, the absence of fixed exchange rates, larger foreign exchange reserves, moderate debt and stronger banking systems.
South Africa, Nigeria and the Philippines’ central banks illustrate Dudley’s point. Most emerging market central banks are keenly aware of the challenges they are facing from the well-publicized shift in Fed policy and are responding in a disciplined and predictable manner.
Last week SARB said it remains in a tightening cycle but added that this doesn’t mean rates have to be changed at every meeting. SARB maintained its rate after raising it by 50 basis points in January in response to capital outflows and a plunge in the rand.
The recent improvement in global sentiment towards emerging markets had boosted the rand and thus improved the inflationary outlook, giving the central bank breathing space as it seeks to solve the dilemma of sluggish growth and inflationary pressures.
Like SARB, the Central Bank of Nigeria (CBN) also maintained its policy rate, but tightened policy by raising the cash reserve requirement on private sector deposits – in January it had raised the CRR on public sector deposits – saying the need to safeguard stability “required firm and bold measures.”
"Thus, prudent monetary stance would also facilitate better reserve and exchange rate management in an environment where Fed tapering increases pressure on emerging economies’ financial markets," CBN said, showing a steady hand amid a challenging international and domestic environment.
Bangko Sentral ng Pilipinas (BSP) also kept its policy rate steady but raised the reserve requirement to curb liquidity in a move that was signaled by the central bank’s governor last week after he said an early and gradual adjustment of monetary policy rather than discreet movements would be less disruptive to businesses.
The Philippine central bank added that it would “consider further adjustments in its policy tools to safeguard price and financial stability" and "buoyant domestic growth prospects allow some scope for a measured adjustment in the BSP's policy instruments amid the ongoing normalization of monetary policy overseas."
The annexation of Crimea by Russia from Ukraine added a new dimension to the global risk spectrum, but the National Bank of Georgia responded in a calm and measured manner.
The central bank of Georgia – on the eastern border of the Black Sea in the Caucasus region – said it still believed that monetary stimulus should be withdrawn but put off any rate rise, citing the potential threat from geopolitical factors and uncertainty that could undermine investors’ mood, demand for its exports and remittances from workers abroad.
Through the first 13 weeks of this year, rates have been raised 11 times, or 9 percent of this year’s 125 policy decisions by the 90 central banks followed by Central Bank News, down from 10 percent at the end of February.
But the Global Monetary Policy Rate (GMPR) – the average policy rate – rose to 5.56 percent this week from 5.53 percent at the end of January, helped by Zambia’s 175 basis-point rate rise.
Rates have been cut 15 times so far this year, or 12 percent of this year’s policy decisions, down from 14 percent at the end of February, as central banks still seek to shore up growth while inflationary pressures worldwide are kept at bay from sluggish global demand.
LIST OF LAST
WEEK’S CENTRAL BANK DECISIONS:
- Israel holds rate, changes depend on CPI, growth, shekel
- Hungary cuts rate for 20th time but signals pause
- Armenia holds rate, inflation seen falling further
- Nigeria holds rate, raises CRR to 15%, bold moves needed
- Morocco maintains rate, cuts reserve ratio by 200 bps
- Georgia holds rate on geopolitical risk, but sees tightening
- Rwanda holds rate to sustain credit to private sector
- Philippines holds rate, raises RR, to mull further tightening
- Norway holds rate, repeats on hold until summer 2015
- Taiwan holds rate on moderate growth, mild CPI outlook
- South Africa holds rate, but remains in tightening cycle
- Czech holds rate, confirms will intervene to cap FX rate
- Romania maintains rate after 6 cuts on subdued inflation
- Zambia raises rate 175 bps to 12% in 2nd hike in row
- Trinidad holds rate, sees rising inflationary pressure
TABLE WITH
LAST WEEK’S MONETARY POLICY DECISIONS
| COUNTRY | MSCI | NEW RATE | OLD RATE | 1 YEAR AGO |
| ISRAEL | DM | 0.75% | 0.75% | 1.75% |
| ARMENIA | 7.50% | 7.50% | 8.00% | |
| MOROCCO | EM | 3.00% | 3.00% | 3.00% |
| NIGERIA | FM | 12.00% | 12.00% | 12.00% |
| HUNGARY | EM | 2.60% | 2.70% | 5.00% |
| RWANDA | 7.00% | 7.00% | 7.50% | |
| GEORGIA | 4.00% | 4.00% | 4.50% | |
| NORWAY | DM | 1.50% | 1.50% | 1.50% |
| PHILIPPINES | EM | 3.50% | 3.50% | 3.50% |
| TAIWAN | EM | 1.88% | 1.88% | 1.88% |
| MOLDOVA | 3.50% | 3.50% | 4.50% | |
| ALBANIA | 2.75% | 2.75% | 3.75% | |
| SOUTH AFRICA | EM | 5.50% | 5.50% | 5.00% |
| CZECH REPUBLIC | EM | 0.05% | 0.05% | 0.05% |
| ROMANIA | FM | 3.50% | 3.50% | 5.25% |
| ZAMBIA | 12.00% | 10.25% | 9.25% |
This week (Week
14) six central banks will be deciding on monetary policy, including Australia,
India, Brazil, Uganda, Ghana and the European Central Bank.
| COUNTRY | MSCI | DATE | CURRENT RATE | 1 YEAR AGO |
| AUSTRALIA | DM | 1-Apr | 2.50% | 3.00% |
| INDIA | EM | 1-Apr | 8.00% | 7.50% |
| BRAZIL | EM | 2-Apr | 10.75% | 7.50% |
| UGANDA | 2-Apr | 11.50% | 12.00% | |
| GHANA | 2-Apr | 18.00% | 15.00% | |
| EURO AREA | DM | 3-Apr | 0.25% | 0.75% |
Friday, March 28, 2014
Trinidad holds rate, sees rising inflationary pressures
Trinidad and Tobago's central bank maintained its repurchase rate at 2.75 percent but said it would be intensifying its liquidity management operations in the coming period to reduce excess liquidity in the banking system that is keeping domestic treasury rates low.
The Central Bank of Trinidad and Tobago, which last cut its rate by 25 basis points in 2012, said underlying inflationary pressures remain well contained but are likely to build up later in the year as economic activity ramps up.
"In light of these circumstances, the Central Bank has decided to maintain the 'repo' rate at 2.75 percent while its liquidity absorption measures take effect. The Bank will continue to monitor developments in the market and is prepared to take further actions as appropriate," the bank said.
Liquidity eased in January before rising again in February to March, with average excess liquidity up to US$ 7.1 billion in the March 5-24 period as fiscal injections rebounded. Open market operations and central bank sales of foreign exchange to dealers withdrew $893 million in January, $831 million in February and $395 million in the first three weeks of March.
The Central Bank of Trinidad and Tobago, which last cut its rate by 25 basis points in 2012, said underlying inflationary pressures remain well contained but are likely to build up later in the year as economic activity ramps up.
"In light of these circumstances, the Central Bank has decided to maintain the 'repo' rate at 2.75 percent while its liquidity absorption measures take effect. The Bank will continue to monitor developments in the market and is prepared to take further actions as appropriate," the bank said.
Liquidity eased in January before rising again in February to March, with average excess liquidity up to US$ 7.1 billion in the March 5-24 period as fiscal injections rebounded. Open market operations and central bank sales of foreign exchange to dealers withdrew $893 million in January, $831 million in February and $395 million in the first three weeks of March.
Zambia raises rate 175 bps to 12% in 2nd hike in row
Zambia's central bank raised its policy rate by a further 175 basis points to 12.0 percent on persistent inflationary pressures and said it expects "the passthrough effects from the depreciation of the exchange rate will impact on inflation."
The Bank of Zambia, which has now raised its rate by 225 basis points this year after raising it by 50 basis points in 2013, added that the increase in the supply of select food items in the coming harvest should have a moderating impact on inflation.
"The Committee expects that this adjustment (to policy rates) to buttress the measures implemented in the recent past and consequently contribute to moderating inflationary pressures," the bank said.
Zambia's inflation rate rose to 7.7 percent in March, up from 7.6 percent in February and the fifth consecutive month of rising inflation.
Last month the central bank said the rate rise and recent increases in reserve ratio to 14 percent from 8 percent should help put inflation on the path toward the bank's 2014 target of 6.5 percent.
Zambia's kwacha currency has been depreciating since late October due to lower copper prices - which account for some 60 percent of the country's exports - in reaction to slower growth in China.
The Bank of Zambia, which has now raised its rate by 225 basis points this year after raising it by 50 basis points in 2013, added that the increase in the supply of select food items in the coming harvest should have a moderating impact on inflation.
"The Committee expects that this adjustment (to policy rates) to buttress the measures implemented in the recent past and consequently contribute to moderating inflationary pressures," the bank said.
Zambia's inflation rate rose to 7.7 percent in March, up from 7.6 percent in February and the fifth consecutive month of rising inflation.
Last month the central bank said the rate rise and recent increases in reserve ratio to 14 percent from 8 percent should help put inflation on the path toward the bank's 2014 target of 6.5 percent.
Zambia's kwacha currency has been depreciating since late October due to lower copper prices - which account for some 60 percent of the country's exports - in reaction to slower growth in China.
Romania maintains rate after 6 cuts on subdued inflation
Romania's central bank maintained its policy rate at 3.5 percent, as expected, and said its latest assessment confirms that inflation should remain subdued in the months ahead, in line with the bank's forecast that inflation will return to and remain inside the bank's tolerance range.
The National Bank of Romania (NBR), which last month cut its rate for the sixth time in a row, said the risks in its outlook stem primarily from external sources. This includes capital flow volatility, which is linked to investors' risk appetite and driven by geopolitical developments, faster cross-border deleveraging by banks and the overall changes to investors' exposure to emerging economies.
Romania's inflation rate fell to a historic low of 1.05 percent in February from 1.55 percent end-2013, with the average annual HIPC rate, which can be compared with EU countries, declining to 2.6 percent from 2.9 percent in January. In January 2013 the inflation rate hit 6.0 percent.
Last month the the NBR revised upwards its 2014 inflation forecast to 3.5 percent from 3.0 percent and forecast 2015 inflation of 3.2 percent. The central bank's vice governor said in New York on Feb. 6 that the central bank had ended its rate cutting cycle.
The National Bank of Romania (NBR), which last month cut its rate for the sixth time in a row, said the risks in its outlook stem primarily from external sources. This includes capital flow volatility, which is linked to investors' risk appetite and driven by geopolitical developments, faster cross-border deleveraging by banks and the overall changes to investors' exposure to emerging economies.
Romania's inflation rate fell to a historic low of 1.05 percent in February from 1.55 percent end-2013, with the average annual HIPC rate, which can be compared with EU countries, declining to 2.6 percent from 2.9 percent in January. In January 2013 the inflation rate hit 6.0 percent.
Last month the the NBR revised upwards its 2014 inflation forecast to 3.5 percent from 3.0 percent and forecast 2015 inflation of 3.2 percent. The central bank's vice governor said in New York on Feb. 6 that the central bank had ended its rate cutting cycle.
Central Bank News Link List - Mar 28, 2014 - Fed's Evans sees rate increase in second half of 2015
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 Evans sees rate increase in second half of 2015 (Bloomberg)
- Spanish deflation boosts rate-cut bets (Dow Jones)
- Chile March rate cut a unanimous decision - central bank minutes (Reuters)
- Mexico positioned well for rise in US interest rates - Carstens (WSJ)
- OECD sees central banks unwinding (Dow Jones)
- BoE assessment of slack in economy but hard to judge – Reuters poll (Reuters)
- Fed Gov Tarullo: Good reason financial regs vary among regions (MNI)
- Fed of 1970s shows capacity may mislead (Bloomberg)
- Russia to set up own payment system (AP)
- Mauritius central banker says policy behind curve (Reuters)
- Fed’s Dudley warns against explicit global policy coordination (Reuters)
- BoJ can maximize policy impact by ‘surprising’ markets: Japan’s Amari (Reuters)
- Albania holds rates at record low, calls on banks to lend (Reuters)
- Euro-franc floor still key element of SNB’s policy – Zurbruegg (Dow Jones)
- Mexico’s Carstens says monetary policy no tool for most farm prices (Bloomberg)
- Perceived shift in US Fed’s monetary policy causes uncertainty (Spiro/SCMP)
Thursday, March 27, 2014
Czech holds rate, confirms will intervene to cap FX rate
The Czech Republic's central bank maintained its benchmark two-week repo rate at 0.05 percent and confirmed its continued commitment to intervene on foreign exchange markets to keep the koruna's rate against the euro close to 27.
The Czech National Bank (CNB) started using the exchange rate as an additional tool to ease monetary conditions and fight deflation in November, 12 months after it cut the repo rate to the current level. It has committed itself to defend the cap on the koruna until at least 2015.
"The CNB Bank Board repeated that it regards the commitment as one-side," the bank said about its intervention on foreign exchange markets to prevent excessive appreciation of the koruna below 27 to the euro. On the weaker side of the 27 level, the CNB is allowing the exchange rate to float freely.
The koruna was quoted at 27.4 to the euro today, slightly down from 27.3 end-2013.
Inflation in the Czech Republic was steady at 0.2 percent in February and January, sharply down from December's 1.4 percent, but mainly due to a bigger than expected drop in regulated prices.
The CNB targets inflation of 2.0 percent, plus/minus one percentage point.
www.CentralBankNews.info
The Czech National Bank (CNB) started using the exchange rate as an additional tool to ease monetary conditions and fight deflation in November, 12 months after it cut the repo rate to the current level. It has committed itself to defend the cap on the koruna until at least 2015.
"The CNB Bank Board repeated that it regards the commitment as one-side," the bank said about its intervention on foreign exchange markets to prevent excessive appreciation of the koruna below 27 to the euro. On the weaker side of the 27 level, the CNB is allowing the exchange rate to float freely.
The koruna was quoted at 27.4 to the euro today, slightly down from 27.3 end-2013.
Inflation in the Czech Republic was steady at 0.2 percent in February and January, sharply down from December's 1.4 percent, but mainly due to a bigger than expected drop in regulated prices.
The CNB targets inflation of 2.0 percent, plus/minus one percentage point.
www.CentralBankNews.info
South Africa holds rate, but remains in tightening cycle
South Africa’s
central bank maintained its benchmark repurchase rate at 5.5 percent, as
expected, but said it remains in a tightening cycle and the pace of future
tightening will depend on inflation, the economy and global developments.
But the
South African Reserve Bank (SARB) added that even if the policy rate is below
what can be considered normal and is likely to rise in the medium term, this
does not mean that there has to be a change in stance at every meeting and the
size of the changes may not always be of the same magnitude.
Gill Marcus, SARB
governor, said monetary policy is still facing the dilemma of a subdued
economic outlook amid persistent upside risks to inflation despite the recent
appreciation of the rand, which remains vulnerable to shifts in global risk
sentiment and adverse domestic developments.
While SARB
maintained its forecast for 2014 headline inflation to average 6.3 percent,
with 6.6 percent in the fourth quarter, the forecast for average 2015 inflation
was cut to 5.8 percent from a previous 6.0 percent, with inflation expected to
average 5.6 percent in the final quarter of 2015 from 5.9 percent previously.
The slight
improvement in the inflation outlook is mainly due to the lagged effect of January's 50 basis point rate increase and inflation is still expected to breach the SARB’s upper
end of its target range in the second quarter of this year before returning to
the bank's 3.0 - 6.0 percent range in the second quarter of 2015 when it is expected to measure 5.9
percent.
Taiwan holds rate on moderate growth, mild CPI outlook
Taiwan's central bank left its benchmark rate steady at 1.875 percent, as expected, and said the government's budget office was forecasting higher 2014 growth despite a slowdown in China's growth and the U.S. Fed's scaling back on its asset purchases, which "might complicate the outlook for the global economy" due to cross-border spillovers and heightened financial market volatility.
The Central Bank of the Republic of China (Taiwan), which has maintained its rate since June 2011, said the rate was held steady due to its assessment of "moderate growth and mild inflation outlook in the domestic economy and lingering uncertainties in the global economy."
Economic growth in the first quarter of 2014 is forecast at 3.02 percent and the full year forecast is 2.82 percent, up from in 2.11 percent in 2013. Fourth quarter Gross Domestic Product rose by 2.43 percent from the third quarter for annual growth of 2.95 percent.
Employment is also continuing to rise, the bank said, particularly in the services sector with the unemployment rate down from 4.05 percent in February from January's 4.07 percent.
Inflation is forecast to remain stable at an average 1.07 percent in 2014 amid mild global inflation expectations, muted domestic demand and a negative output gap.
In February Taiwan's consumer prices fell by 0.05 percent from inflation of 0.76 percent in January. For the first two months of the year, consumer prices averaged 0.39 percent.
www.CentralBankNews.info
The Central Bank of the Republic of China (Taiwan), which has maintained its rate since June 2011, said the rate was held steady due to its assessment of "moderate growth and mild inflation outlook in the domestic economy and lingering uncertainties in the global economy."
Economic growth in the first quarter of 2014 is forecast at 3.02 percent and the full year forecast is 2.82 percent, up from in 2.11 percent in 2013. Fourth quarter Gross Domestic Product rose by 2.43 percent from the third quarter for annual growth of 2.95 percent.
Employment is also continuing to rise, the bank said, particularly in the services sector with the unemployment rate down from 4.05 percent in February from January's 4.07 percent.
Inflation is forecast to remain stable at an average 1.07 percent in 2014 amid mild global inflation expectations, muted domestic demand and a negative output gap.
In February Taiwan's consumer prices fell by 0.05 percent from inflation of 0.76 percent in January. For the first two months of the year, consumer prices averaged 0.39 percent.
www.CentralBankNews.info
Norway holds rate, repeats on hold until summer 2015
Norway's central bank held its policy rate steady at 1.5 percent, as expected, and reiterated that it expects to maintain this rate until the summer of 2015 followed by a gradual increase.
Norges Bank, which last cut its rate in March 2012, said the Norwegian economy was performing broadly as projected in the December policy report though growth prospects had weakened somewhat.
However, the bank still expects growth to pick up further ahead, with capacity utilization increasing gradually towards a normal level after falling over the next year.
"At its meeting, the Executive Board decided that the key policy rate should be in the interval 1% - 2% in the period to the publication of the next report on 19 June 2014, unless the Norwegian economy is exposed to new major shocks," the bank said.
Growth in petroleum investment and housing investment is likely to be somewhat weaker than projected, with the krone currency slightly weaker than assumed and 2013 wage growth of 3.9 percent was higher than expected, the bank said.
"There are prospects that consumer price inflation will be slightly higher than previously projected," the bank quoted its governor, Oeystein Olsen, as saying. Norges Bank targets 2.5 percent inflation.
Norges Bank, which last cut its rate in March 2012, said the Norwegian economy was performing broadly as projected in the December policy report though growth prospects had weakened somewhat.
However, the bank still expects growth to pick up further ahead, with capacity utilization increasing gradually towards a normal level after falling over the next year.
"At its meeting, the Executive Board decided that the key policy rate should be in the interval 1% - 2% in the period to the publication of the next report on 19 June 2014, unless the Norwegian economy is exposed to new major shocks," the bank said.
Growth in petroleum investment and housing investment is likely to be somewhat weaker than projected, with the krone currency slightly weaker than assumed and 2013 wage growth of 3.9 percent was higher than expected, the bank said.
"There are prospects that consumer price inflation will be slightly higher than previously projected," the bank quoted its governor, Oeystein Olsen, as saying. Norges Bank targets 2.5 percent inflation.
Philippines holds rate, raises RR, to mull further tightening
The central bank of the Philippines maintained its policy rate at 3.50 percent, along with its other rates, but raised the reserve requirement by one percentage point and said "it will consider further adjustments in its policy tools to safeguard price and financial stability."
Bangko Sentral ng Pilipinas (BSP), which has kept its benchmark overnight borrowing rate steady since October 2012, said the reserve requirement was raised to "guard against the potential risks to financial stability that could arise from continued strong liquidity growth and rapid credit expansion."
The bank said it held its main rate steady because the the path of inflation is likely to remain within the central bank's target ranges of in 2014 and 2015 but "buoyant domestic growth prospects allow some scope for a measured adjustment in the BSP's policy instruments amid the ongoing normalization of monetary policy overseas."
The central bank - which targets inflation this year of 4.0 percent, plus/minus one percentage point, and 2015 inflation of 3.0 percent, plus/minus one percentage point - said inflation expectations were broadly aligned with the target though "the balance of risks to the inflation outlook continue to be skewed to the upside, with potential price pressures emanating form pending petitions for adjustments in utility rates and from the possible increases in food and oil prices."
Bangko Sentral ng Pilipinas (BSP), which has kept its benchmark overnight borrowing rate steady since October 2012, said the reserve requirement was raised to "guard against the potential risks to financial stability that could arise from continued strong liquidity growth and rapid credit expansion."
The bank said it held its main rate steady because the the path of inflation is likely to remain within the central bank's target ranges of in 2014 and 2015 but "buoyant domestic growth prospects allow some scope for a measured adjustment in the BSP's policy instruments amid the ongoing normalization of monetary policy overseas."
The central bank - which targets inflation this year of 4.0 percent, plus/minus one percentage point, and 2015 inflation of 3.0 percent, plus/minus one percentage point - said inflation expectations were broadly aligned with the target though "the balance of risks to the inflation outlook continue to be skewed to the upside, with potential price pressures emanating form pending petitions for adjustments in utility rates and from the possible increases in food and oil prices."
Central Bank News Link List - Mar 27, 2014 - Brazil central bank raises inflation forecast, signals rate hikes
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 central bank raises inflation forecast, signals rate hikes (Reuters)
- Fed’s Bullard sees potential risk of bubble as easy policy unwound (Reuters)
- Fed Bullard: Intl mon policy coordination gains small (MNI)
- New Bank of England rate-setter to be announced in mid-May (Reuters)
- Russia central bank has no plans to limit currency swaps (RIA Novosti)
- New Zealand dollar rally tests exporters, English says (Bloomberg)
- POLL-India central bank to keep rates on hold next week (Reuters)
- BOE warns against complacency as central bank policy normalizes (WSJ)
- Russian central bank head hopes fall in investment is short-lived (Reuters)
- RBNZ Spencer: To ease mortgage rules once housing mkt moderates (MNI)
- Labour plans RBNZ changes as central bank becomes poll issue (Bloomberg)
- Danish central bank signals opposition to proprietary trade ban (Bloomberg)
- Oil warning sounded by Norway central bank member Ulltveit-Moe (Bloomberg)
- Bank of Ghana MPC to meet March 31-April 2 (Bank of Ghana)
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