Angola's central bank maintained its benchmark Basis Interest Rate (BNAS) at 9.25 percent, citing a contraction in credit but accelerating inflation.
The National Bank of Angola (BNA), which raised its rate by 25 basis points in March, said credit issued to the economy contracted by 0.24 precent in April but was still up by 1.95 percent in cumulative terms this year.
Angola's consumer price inflation rate rose to an annual 8.23 percent in April from 7.87 percent in March, with a 0.36 percentage point rise in food and non-alcoholic beverages the largest contributor.
The BNA, whose monetary policy committee met on May 29, added that the average exchange rate of the kwanza to the U.S. dollar depreciated by 1.21 percent in April from March, for a rate of 109.293 kwanza to the dollar.
www.CentralBankNews.info
Saturday, May 30, 2015
Thursday, May 28, 2015
Central Bank News Link List - May 29, 2015: G7 unconcerned about latest bond market volatility – source
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.
- G7 unconcerned about latest bond market volatility – source (MNI)
- Fed’s Williams: US rate rise likely this year, economy to bounce back (Reuters)
- Yen drops to 12-year low versus dollar as policy split sharpens (Bloomberg)
- Unexpectedly weak household spending casts doubt on BOJ optimism (Reuters)
- China c.bank draining cash from banks through back-door repos (Reuters)
- Brazil eases bank reserve requirements to bolster home lending (Reuters)
- Brazil’s central bank faces growing concern on rate hikes (Reuters)
- St Louis Fed’s Bullard: Base case for rate hike this year (MNI)
- Fed official: ‘I regret my lack of persuasiveness’ (Reuters)
- First UK rate rise in Q1 as economists stick to their guns: poll (Reuters)
- India’s central bank expected to cut interest rate again (WSJ)
- More rate cuts won’t help economy, BoT’s Paiboon says (Bloomberg)
- ECB warns of record low interest rate threat to insurers (Reuters)
- Indonesia’s central bank governor sees below target GDP in 2015 (Reuters)
- BOE launches trial run for ‘Super Thursday’ schedule shift (MarketWatch)
- No need to tweak policy settings despite weak GDP – BSP (Philippine Star)
- Taiwan dollar closes weaker as central bank seen intervening (Bloomberg)
- Swatch chairwoman slams Swiss central bank’s monetary policy (Dow Jones)
- Bernanke says Australia would ‘have to respond’ to dollar threat (SMH)
Fiji holds rate, notes rising imports, Australia slowdown
Fiji's central bank maintained its benchmark Overnight Policy Rate at 0.5 percent but cautioned that rising imports in connection with an expanding economy coupled with a likely slowdown in Fiji's key trading partners, particularly Australia, could "weaken our external position."
The Reserve Bank of Fiji (RBF), which has held its rate steady since November 2011, said all sectors of the economy were performing positively and economic activity was continuing to strengthen, propelled by increased consumption and investment.
Currently, the RBF's dual mandate remains stable, RBF Governor Barry Whiteside said in a statement, noting that inflation eased to 1.5 percent in April from 2.4 percent in March while foreign reserves amounted to some $1.877 billion as of May 28 compared with some $1.857 billion at the end of April.
The Reserve Bank of Fiji issued the following statement:
The Reserve Bank of Fiji (RBF), which has held its rate steady since November 2011, said all sectors of the economy were performing positively and economic activity was continuing to strengthen, propelled by increased consumption and investment.
Currently, the RBF's dual mandate remains stable, RBF Governor Barry Whiteside said in a statement, noting that inflation eased to 1.5 percent in April from 2.4 percent in March while foreign reserves amounted to some $1.877 billion as of May 28 compared with some $1.857 billion at the end of April.
The Reserve Bank of Fiji issued the following statement:
Ukraine holds rate but looks to cut when FX stabilizes
Ukraine's central bank maintained its benchmark discount rate at 30 percent to help stabilize the the domestic money and foreign exchange markets but is looking towards loosening its policy in "the near future" as the hryvnia's exchange rate stabilizes.
The National Bank of Ukraine (NBU), which has raised its rate by 16 percentage points this year and by a total of 23.50 percentage points since April 2014, said a stable money market would help restore the monetary transmission mechanism and thus enable banks to provide lending to underpin growth should monetary policy be loosened.
Members of the central bank's monetary policy committee "raised concerns over the Ukrainian economy sliding into a protracted recession," noting that the output of key sectors shrank by 23.4 percent in April and "heightened risks" that the economy would slow down dramatically.
However, the NBU added that the current level of the discount rate would "help ensure a firm downward path of inflation and encourage the return of household deposits to the banking system."
In April the stock of hryvnia deposits by households rose by 4.2 billion, a sign that the public confidence in the banking sector was "gradually being restored."
Ukraine's hryvnia started falling in February last year after pro-Russian forces occupied the Crimean peninsula and continue to tumble as armed conflict broke out in Eastern Ukraine.
In 2014 the hryvnia depreciated by almost 50 percent against the U.S. dollar but following a cease-fire agreement in February this year, rate hikes and a series of administrative measures by the central bank, the hryvenia started stabilizing.
Today the hryvnia was trading at 21.22 to the dollar for a 26 percent decline since the start of this year but much stronger than its low of 33.7 in mid-February. Compared with the start of 2014, the hryvenia has lost 61 percent of its value.
The NBU said the official UAH/USD exchange rate had fluctuated within a range of 21.4 to 23.5 throughout April and then in May by a narrower range of 20.6 to 20.8 to the dollar.
Inflation, however, has continued to accelerate, hitting 60.9 percent in April from 45.8 percent in March, boosted by an increase in utility and natural gas tariffs but also by "peculiarities" in the collection method used the statistics office, the central bank said.
The National Bank of Ukraine (NBU), which has raised its rate by 16 percentage points this year and by a total of 23.50 percentage points since April 2014, said a stable money market would help restore the monetary transmission mechanism and thus enable banks to provide lending to underpin growth should monetary policy be loosened.
Members of the central bank's monetary policy committee "raised concerns over the Ukrainian economy sliding into a protracted recession," noting that the output of key sectors shrank by 23.4 percent in April and "heightened risks" that the economy would slow down dramatically.
However, the NBU added that the current level of the discount rate would "help ensure a firm downward path of inflation and encourage the return of household deposits to the banking system."
In April the stock of hryvnia deposits by households rose by 4.2 billion, a sign that the public confidence in the banking sector was "gradually being restored."
Ukraine's hryvnia started falling in February last year after pro-Russian forces occupied the Crimean peninsula and continue to tumble as armed conflict broke out in Eastern Ukraine.
In 2014 the hryvnia depreciated by almost 50 percent against the U.S. dollar but following a cease-fire agreement in February this year, rate hikes and a series of administrative measures by the central bank, the hryvenia started stabilizing.
Today the hryvnia was trading at 21.22 to the dollar for a 26 percent decline since the start of this year but much stronger than its low of 33.7 in mid-February. Compared with the start of 2014, the hryvenia has lost 61 percent of its value.
The NBU said the official UAH/USD exchange rate had fluctuated within a range of 21.4 to 23.5 throughout April and then in May by a narrower range of 20.6 to 20.8 to the dollar.
Inflation, however, has continued to accelerate, hitting 60.9 percent in April from 45.8 percent in March, boosted by an increase in utility and natural gas tariffs but also by "peculiarities" in the collection method used the statistics office, the central bank said.
Wednesday, May 27, 2015
Canada holds rate, to check effect of high C$ if sustained
Canada's central bank kept its policy rate steady at 0.75 percent, as widely expected, but cautioned that if the recent strengthening of the Canadian dollar on the back of higher oil prices and a softer U.S. dollar is sustained, the "net effect will need to be assessed as more data become available in the months ahead."
The Bank of Canada (BOC), which surprised markets by cutting its rate by 25 basis points in January to counter some of the dampening impact on the economy from the fall in oil prices, added that inflation and economic growth was largely in line with its assessment in April and the "assessment of risks to the inflation profile has not materially changed."
The Canadian dollar, known as the loonie, started depreciating against the U.S. dollar in July 2014 and fell to 1.2790 in mid-March - from 1.06 at the start of 2014 - as investors speculated that the BOC could cut rates further. But a rebound in oil prices and optimistic comments by BOC Governor Stephen Poloz in April changed investors' perception and the loonie strengthened.
By mid-May the Canadian dollar had risen to 1.19 before easing back to 1.247 today, still a decline of almost 7 percent since the start of this year.
The impact of last year's halving of crude oil prices is is still having an impact on Canada's consumer price inflation, which fell to 0.8 percent in April from 1.2 percent, below the BOC's 1-3 percent inflation target range. But the BOC said core inflation remains above 2 percent - it was 2.3 percent in April - "boosted by the pass-through effects of past depreciation of the Canadian dollar."
Consistent with the "persistent slack in the economy," the BOC estimates that the underlying trend of inflation is 1.6 to 1.8 percent.
The BOC repeated that is sees economic activity picking up in the second quarter, noting that recent data suggest that consumption was holding up relatively well despite the impact of lower oil prices on overall income.
In April the BOC cut its forecast for first quarter growth to zero, but raised its forecast for second quarter growth to 1.8 percent and third quarter growth to 2.8 percent. Annual growth in the fourth quarter of 2014 was 2.63 percent, down from 2.75 percent in the third quarter.
The Bank of Canada (BOC), which surprised markets by cutting its rate by 25 basis points in January to counter some of the dampening impact on the economy from the fall in oil prices, added that inflation and economic growth was largely in line with its assessment in April and the "assessment of risks to the inflation profile has not materially changed."
The Canadian dollar, known as the loonie, started depreciating against the U.S. dollar in July 2014 and fell to 1.2790 in mid-March - from 1.06 at the start of 2014 - as investors speculated that the BOC could cut rates further. But a rebound in oil prices and optimistic comments by BOC Governor Stephen Poloz in April changed investors' perception and the loonie strengthened.
By mid-May the Canadian dollar had risen to 1.19 before easing back to 1.247 today, still a decline of almost 7 percent since the start of this year.
The impact of last year's halving of crude oil prices is is still having an impact on Canada's consumer price inflation, which fell to 0.8 percent in April from 1.2 percent, below the BOC's 1-3 percent inflation target range. But the BOC said core inflation remains above 2 percent - it was 2.3 percent in April - "boosted by the pass-through effects of past depreciation of the Canadian dollar."
Consistent with the "persistent slack in the economy," the BOC estimates that the underlying trend of inflation is 1.6 to 1.8 percent.
The BOC repeated that is sees economic activity picking up in the second quarter, noting that recent data suggest that consumption was holding up relatively well despite the impact of lower oil prices on overall income.
In April the BOC cut its forecast for first quarter growth to zero, but raised its forecast for second quarter growth to 1.8 percent and third quarter growth to 2.8 percent. Annual growth in the fourth quarter of 2014 was 2.63 percent, down from 2.75 percent in the third quarter.
Central Bank News Link List - May 27, 2015: China central bank warns of unstable inflation outlook, low prices
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.
- China central bank warns of unstable inflation outlook, low prices (Reuters)
- Spain risks euro split over radical new ECB mandate (Telegraph)
- BOE official was privy to libor manipulation scheme: prosecutors (IBT)
- G-7 eye risks of loose monetary policy (Dow Jones)
- IMF Blanchard: EMU would withstand Grexit thanks to ECB - press (MNI)
- BOJ Iwata: No need to alter 2% target, price trend up (MNI)
- Swedish c.bank prepared to do more if needed - Floden (Reuters)
- Don’t expect Bank of Canada to follow the Fed’s lead on rates (Financial Post)
- RBI may cut repo rate by 25 bps on June 2: Assocham (PTI)
- Bernanke sees no risk of hard landing in China, bullish on US economy (Reuters)
- South Africa rates may have to rise to curb inflation: Groepe (Reuters)
- BoJ minutes: current stance for monetary policy remains appropriate (Alliance)
- Fed’s Jeffrey Lacker still undecided on June rate rise (WSJ)
- Fed’s Fischer says rate hike debate driven by data, not date (Bloomberg)
- China reserve ratio or interest rates cuts more likely in June: analysts (Xinhua)
- Russian central bank says hopes for further cuts to key rate (Reuters)
- Lehman collapse shapes Bank of England’s trading test for lenders (Reuters)
- China wants to internationalize currency so easing capital restrictions (Bloomberg)
- Top Thai banks cut lending rates after cbank push to boost economy (Reuters)
- Polish central bank rejects talk that Belka may step down early (Bloomberg)
- Yellen to be no show at this year’s Jackson Hole central bank conference (AP)
- Brazil central bank studying freeing up reserves for mortgage lending (Reuters)
- Colombia central bank chief says inflation jump 85% food-related (Bloomberg)
- Guatemala central bank head indicted for fraud as crises deepens (Bloomberg)
- Kenya brings forward MPC meeting to consider steps on inflation (Bloomberg)
- Kenya’s cenbank sets next monetary policy committee meet on June 9 (Reuters)
- Azerbaijan central bank’s net loss reached AZN 308.7 mln in 2014 (ABC)
- Slovak central bank slaps extra capital buffers on big banks (Reuters)
Tuesday, May 26, 2015
Kyrgyzstan pushes number of 2015 rate cutters to 36
A total of 36 central banks and monetary authorities worldwide have eased their policy stance so far in 2015 while 14 have tightened their policy, with the National Bank of the Kyrgyz Republic joining the rate-cutting spree on May 25 by cutting its policy rate by 150 basis points.
From July 2014 through January this year, the central bank of Kyrgyzstan raised its policy rate by a total of 500 basis points to curb inflationary pressures from a depreciation of the som currency. But since late April the som's exchange rate has bounced back and inflation has eased steadily after hitting 11.6 percent in January.
Central Bank News, which already tracks the policy rates of 90 central banks worldwide, recently expanded its list of products to include Global Monetary Policy Changes (GMPC), a country-by-country overview of changes to monetary policy.
GMPC aims to capture changes to a wide range of monetary policy instruments, such as reserve requirements, bond purchases or exchange rates, in addition to changes to key interest rates. Major central banks have resorted to unconventional monetary policy measures to stimulate economic activity after cutting rates to effectively zero in the wake of the global financial crises.
GMPC complements Central Bank News’ other products, such as the the Global Interest Rate Monitor (GIRM), which tracks official policy rates, and Global Monetary Policy Highlights (GMPH), which covers key events in monetary policy and includes a summary of rate changes each month.
Following is an alphabetical list of countries that have changed their monetary policy this year. The list is updated and can be accessed on the Central Bank News website under the heading of "Easier or Tighter?" as soon as central banks announce changes to their policy.
Hungary cuts rate 15 bps, cautious easing may continue
Hungary's central bank cut its base rate by another 15 basis points to 1.65 percent and said the outlook for inflation points to "loose monetary conditions for an extended period" and it may continue with "cautious easing" as long as it helps it achieve its inflation target.
The National Bank of Hungary (MNB) restarted its easing cycle in March after putting it on hold in August 2014, has now cut its rate by 45 basis points this year. The rate cut was largely expected and economists first expect the central bank to put its easing cycle on hold when rates hit 1.5 percent.
MNB said there is still a risk of second-round effects taking hold in the wake of falling inflation expectations and inflation is first expected to approach levels around its 3.0 percent target toward the end of the forecast period due to moderate inflation pressures and unused capacity in the economy that is likely to have a disinflationary impact.
Hungary's consumer price inflation rate was minus 0.3 percent in April, up from minus 0.6 percent in March but still the eight consecutive month of deflation.
The central bank said the pace of economic activity was strengthening, but output remains below potential and the domestic economy is still expected to have a disinflationary impact, albeit to a diminished extent as capacity utilization will only improve gradually due to the protracted recovery of Hungary's export markets.
"Inflationary pressures are likely to remain moderate for an extended period," the MNB said.
The National Bank of Hungary (MNB) restarted its easing cycle in March after putting it on hold in August 2014, has now cut its rate by 45 basis points this year. The rate cut was largely expected and economists first expect the central bank to put its easing cycle on hold when rates hit 1.5 percent.
MNB said there is still a risk of second-round effects taking hold in the wake of falling inflation expectations and inflation is first expected to approach levels around its 3.0 percent target toward the end of the forecast period due to moderate inflation pressures and unused capacity in the economy that is likely to have a disinflationary impact.
Hungary's consumer price inflation rate was minus 0.3 percent in April, up from minus 0.6 percent in March but still the eight consecutive month of deflation.
The central bank said the pace of economic activity was strengthening, but output remains below potential and the domestic economy is still expected to have a disinflationary impact, albeit to a diminished extent as capacity utilization will only improve gradually due to the protracted recovery of Hungary's export markets.
"Inflationary pressures are likely to remain moderate for an extended period," the MNB said.
Kyrgyzstan cuts rate 150 bps as inflation falls, som rises
The central bank of the Kyrgyz Republic cut its policy rate by 150 basis points to 9.50 percent in light of a continuing decline in inflation and a slowdown in domestic and foreign demand.
The National Bank of the Kyrgyz Republic began raising its rate in July 2014 to curb inflationary pressures from the depreciating som currency and the rate cut is the first move by the central bank to roll back rate cuts totaling 500 basis points from July through January. Since February the central bank had maintained the policy rate at 11.0 percent.
Inflation in Kygyzstan, which borders Kazakhstan to the north and China to the east, eased to 7.9 percent in April and then to 6.4 percent by mid-May from 10.5 percent at the end of 2014, according to the central bank, which targets inflation of 5.0 to 7.0 percent inflation.
The kyrgyzstani som began depreciating in August 2014 and hit a 2015-low of 63.9 to the U.S. dollar in early April but since then it has bounced back. Today it was quoted at 58.4 to the dollar, steady from 58.9 at the start of the year.
The central bank said its economic growth was still subject to external factors, citing uncertainty among its main trade partners that is affecting it through trade and remittance channels.
High economic growth of 7.0 percent from January through April was mainly driven by an expansion of gold mining at the Kumtor mine. Excluding Kumtor, Gross Domestic Product expanded by an annual 3.7 percent.
The National Bank of the Kyrgyz Republic began raising its rate in July 2014 to curb inflationary pressures from the depreciating som currency and the rate cut is the first move by the central bank to roll back rate cuts totaling 500 basis points from July through January. Since February the central bank had maintained the policy rate at 11.0 percent.
Inflation in Kygyzstan, which borders Kazakhstan to the north and China to the east, eased to 7.9 percent in April and then to 6.4 percent by mid-May from 10.5 percent at the end of 2014, according to the central bank, which targets inflation of 5.0 to 7.0 percent inflation.
The kyrgyzstani som began depreciating in August 2014 and hit a 2015-low of 63.9 to the U.S. dollar in early April but since then it has bounced back. Today it was quoted at 58.4 to the dollar, steady from 58.9 at the start of the year.
The central bank said its economic growth was still subject to external factors, citing uncertainty among its main trade partners that is affecting it through trade and remittance channels.
High economic growth of 7.0 percent from January through April was mainly driven by an expansion of gold mining at the Kumtor mine. Excluding Kumtor, Gross Domestic Product expanded by an annual 3.7 percent.
Monday, May 25, 2015
Central Bank News Link List - May 26, 2015: G7 finance ministers to discuss recent forex moves – Canada
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.
- G7 finance ministers to discuss recent forex moves – Canada (Reuters)
- Fed’s Mester says ‘time is near’ for U.S. interest-rate increase (Bloomberg)
- Fed’s Fischer: Too much weight placed on Fed’s first rate hike (Reuters)
- China interbank rates dive after PBOC eases monetary policy (Business Times)
- BOJ econ report: Japan Q2 industrial output to be flat (MNI)
- China looks to boost use of yuan in Latin America (Reuters)
- ECB expands mandate as it struggles to keep zone intact (NYT)
- BOJ should map out plan for increased monetary easing–IMF (Kyodo)
- Secret Bank of England taskforce investigates fallout of Brexit (Guardian)
- All the loonie bulls disappeared in just one week-here’s why (Bloomberg)
- RBI may cut rate by 25 bps, but CRR reduction unlikely (Business Standard)
- Swedish policy impasse raises fears of runaway housing market (Reuters)
- Swedish c.bank’s Jochnick says underlying inflation on way up (Reuters)
- Peru central bank cuts 2015 growth view to 3.9 percent (Reuters)
- Armenia’s central bank revises upward earlier economic projection (Arka)
- RBA winning room to weaken currency as banks act to cool housing (Bloomberg)
- Investors cut holdings of Mexico peso bonds – cenbank (Reuters)
- Ruble bonds rally as Bank of Russia touts inflation slowdown (Bloomberg)
- Botswana’s growth to remain above 4 pct – central bank (Reuters)
Israel holds rate, warns further shekel rise to hit exports
Israel's central bank maintained its benchmark interest rate at 0.10 percent, but said continued appreciation of the shekel's exchange rate "is liable to weigh on growth of exports and of the tradable sector."
The Bank of Israel (BOI), which cut its rate by 15 basis points in February to counter the negative impact of exports and inflation from the rise in the shekel, noted that the shekel had strengthened by about 1.3 percent against the U.S. dollar since late April though May 22 and year-to-date this amounted to an effective appreciation of 3.7 percent.
In response to the BOI's statement, the shekel jumped 0.8 percent to around 3.86 to the dollar from 3.89. In 2014 it ended at 3.89 to the dollar.
Economic data for the first quarter of this year and for April remain mixed, pointing toward continued growth similar to the last two years, the BOI said. Israel's
Gross Domestic Product is estimated to have expanded by an annual 2.86 percent in the first quarter, slightly down from 2.96 percent in the fourth quarter, with growth led by a 6.5 percent rise in private consumption while fixed capital formation contracted by 7.4 percent and durable goods declined by 11.2 percent.
Exports of goods, excluding ships, aircraft and diamonds, declined by 4.3 percent in dollar terms in April following a 4.7 percent in the first quarter.
Israel's consumer price inflation rate was minus 0.5 percent in April, the eight month in a row of deflation, and one-year inflation expectations from various sources are around the lower bound of the BOI's 1.0 percent to 3.0 percent target range.
"Similar to last month, most private forecasters do not expect a reduction in the Bank of Israel interest rate in the next few months; however, the Telbor curve continues to point to somer probability of such a reduction," the BOI said.
In response to the BOI's statement, the shekel jumped 0.8 percent to around 3.86 to the dollar from 3.89. In 2014 it ended at 3.89 to the dollar.
Economic data for the first quarter of this year and for April remain mixed, pointing toward continued growth similar to the last two years, the BOI said. Israel's
Gross Domestic Product is estimated to have expanded by an annual 2.86 percent in the first quarter, slightly down from 2.96 percent in the fourth quarter, with growth led by a 6.5 percent rise in private consumption while fixed capital formation contracted by 7.4 percent and durable goods declined by 11.2 percent.
Exports of goods, excluding ships, aircraft and diamonds, declined by 4.3 percent in dollar terms in April following a 4.7 percent in the first quarter.
Israel's consumer price inflation rate was minus 0.5 percent in April, the eight month in a row of deflation, and one-year inflation expectations from various sources are around the lower bound of the BOI's 1.0 percent to 3.0 percent target range.
"Similar to last month, most private forecasters do not expect a reduction in the Bank of Israel interest rate in the next few months; however, the Telbor curve continues to point to somer probability of such a reduction," the BOI said.
This week in monetary policy: Israel, Angola, Kyrgyzstan, Hungary, Canada, Ukraine, Fiji and Trinidad & Tobago
This week (May 25 through May 30) central banks from eight countries or jurisdictions are scheduled to decide on monetary policy: Israel, Angola, the Kyrgyz Republic, Hungary, Canada, Ukraine, Fiji and Trinidad & Tobago.
Following table includes the name of the country, its MSCI classification, the direction of the latest decision, the date the new policy decision will be announced, the current policy rate, and the rate one year ago.
The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.
| COUNTRY | MSCI | LATEST | DATE | CURRENT RATE | 1 YEAR AGO |
| ISRAEL | DM | UNCH. | 25-May | 0.10% | 0.75% |
| ANGOLA | UNCH. | 25-May | 9.25% | 9.25% | |
| KYRGYZSTAN | UNCH. | 25-May | 11.00% | 6.00% | |
| HUNGARY | EM | CUT | 26-May | 1.80% | 2.40% |
| CANADA | DM | UNCH. | 27-May | 0.75% | 1.00% |
| UKRAINE | FM | UNCH. | 28-May | 30.00% | 9.50% |
| FIJI | UNCH. | 28-May | 0.50% | 0.50% | |
| TRINIDAD & TOBAGO | RAISE | 29-May | 3.75% | 2.75% |
Saturday, May 23, 2015
Pakistan cuts rates 100 bps as inflation continues to fall
Pakistan's central bank effectively cut its policy interest rates by 100 basis points and narrowed its rate corridor by 50 points to 200 basis points as inflation continues its downward trajectory and economic conditions improve, including a smaller current account deficit.
The State Bank of Pakistan (SBP), which earlier this year revised its rate corridor and introduced a SBP target rate for the money market overnight repo rate, said economic growth was expected to accelerate due to the gradual realization of investments in energy and infrastructure projects.
"Overcoming energy shortages and improving law and order conditions is expected to provide further impetus in reviving investment and higher production," SBP said.
Pakistan's Gross Domestic Product is estimated to have expanded by 4.2 percent in fiscal 2015, which ends on June 30, up from 4.0 percent in FY14.
Pakistan's consumer price inflation rate declined to 2.11 percent in April from 2.49 percent the previous month, continuing the drop since 8.2 percent in June last year, reflecting soft international commodity prices, a stable exchange rate, contained government borrowing, moderate aggregate demand and the central bank's "earlier conservative monetary policy stance."
SBP said inflation expectations also remain subdued but uncertainty about oil prices and possible changes in domestic energy prices are the main risks to its outlook.
In March the SBP's board of directors approved changes to the bank's rate corridor to enhance the effectiveness of its monetary policy and better manage liquidity in the interbank market. Under its previous regime from 2009, when the SBP established an interest rate corridor, there was no instrument to limit very frequent drops in the repo rate and the money market repo rate also at times exceeded the reverse repo rate, which was the policy rate.
In order to improve the rate corridor, the SBP set a target rate between the floor and ceiling rates of the corridor and use purchases and sales of government securities along with other open market operations to keep the money market weighted overnight rate close to the target rate.
Today the ceiling of the rate corridor was reduced by 100 basis points to 7.0 percent from 8.0 percent, with the new SBP target rate, or its main policy rate, set 50 points below this ceiling rate. By narrowing the rate corridor by 50 points to 200 points, the floor rate is set at 5.0 percent.
The State Bank of Pakistan (SBP), which earlier this year revised its rate corridor and introduced a SBP target rate for the money market overnight repo rate, said economic growth was expected to accelerate due to the gradual realization of investments in energy and infrastructure projects.
"Overcoming energy shortages and improving law and order conditions is expected to provide further impetus in reviving investment and higher production," SBP said.
Pakistan's Gross Domestic Product is estimated to have expanded by 4.2 percent in fiscal 2015, which ends on June 30, up from 4.0 percent in FY14.
Pakistan's consumer price inflation rate declined to 2.11 percent in April from 2.49 percent the previous month, continuing the drop since 8.2 percent in June last year, reflecting soft international commodity prices, a stable exchange rate, contained government borrowing, moderate aggregate demand and the central bank's "earlier conservative monetary policy stance."
SBP said inflation expectations also remain subdued but uncertainty about oil prices and possible changes in domestic energy prices are the main risks to its outlook.
In March the SBP's board of directors approved changes to the bank's rate corridor to enhance the effectiveness of its monetary policy and better manage liquidity in the interbank market. Under its previous regime from 2009, when the SBP established an interest rate corridor, there was no instrument to limit very frequent drops in the repo rate and the money market repo rate also at times exceeded the reverse repo rate, which was the policy rate.
In order to improve the rate corridor, the SBP set a target rate between the floor and ceiling rates of the corridor and use purchases and sales of government securities along with other open market operations to keep the money market weighted overnight rate close to the target rate.
Today the ceiling of the rate corridor was reduced by 100 basis points to 7.0 percent from 8.0 percent, with the new SBP target rate, or its main policy rate, set 50 points below this ceiling rate. By narrowing the rate corridor by 50 points to 200 points, the floor rate is set at 5.0 percent.
Friday, May 22, 2015
Central Bank News Link List - May 22, 2015: Yellen sees rate rise in 2015, gradual pace of tightening
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.
- Yellen sees rate rise in 2015, gradual pace of tightening (Bloomberg)
- It’s time for RBI to cut rate, says Finance Minister Arun Jaitley (PTI)
- Brazil central bank President Tombing repeats intent to fight inflation (Dow Jones)
- BOE Shafik: monetary policy can offset risks permanent damage (MNI)
- Draghi: Structural reforms will unlock Europe’s growth potential (Bloomberg)
- Guatemala arrests central bank chief, 14 others, in bribery probe (Reuters)
- Canada rates may drop to zero in 6 to 18 months, Wolf says (Bloomberg)
- Mexican cenbank likely to intervene more if peso slumps further: Reuters poll
- Indonesia’s central bank governor says he sees ‘bumpy road ahead’ (Reuters)
- India’s central bank seeks to simplify forex rules (Reuters)
- Kazakh central bank sees growth, stable currency at current oil price (Reuters)
- Dominican Bank chief boosts nation’s GDP forecast to 6% (Bloomberg)
- Saudi central bank insists economy can manage oil price slump (PressTV)
- ECB ‘told Ireland’ to stand with failing banks (Irish Times)
- Vietnam’s central bank pledges bring bad debt ratio to 3 pct (Thanh Nien)
- Hungary banks aim to boost corporate lending – central bank (Reuters)
- Central bank warns over Finland’s financial system (Reuters)
- Clock ticking for Bulgarian bank checks, lenders warn (Reuters)
- Czech central bank to debate limiting bond purchases by banks (Reuters)
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