The central bank of the Dominican Republic held its monetary policy interest rate steady at 5.00 percent, saying inflation is expected to remain below the lower limit of the target range in 2015 but then converge to the center of the range during the policy horizon.
The Central Bank of the Dominican Republic (CRBBB) has cut its rate by 125 basis points this year and most recently in May.
Consumer price inflation in the Dominican Republic rose slightly to 0.23 percent in May from minus 0.04 percent in April.
The central bank targets inflation of 4.0 percent, plus/minus 1 percentage point.
The economy of the Dominican Republic is developing in line with forecasts and the monthly indicator of economic activity (IMAE) expanded by 6.1 percent at the end of April while the annual growth of credit to the private sector expanded by around 12 percent in the June.
Last month the central bank's governor raised his forecast for economic growth this year to around 6 percent, up from the previous forecast of 5.0-5.5 percent.
Tuesday, June 30, 2015
Central Bank News Link List - June 30, 2015: ECB ready to test freedom to act with new tools for Greek crises
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 ready to test freedom to act with new tools for Greek crises (Bloomberg)
- Central banks find limits, risks in monetary policy - RBA (Reuters)
- Aussie central bank chief unmoved on China after market tumoil (Reuters)
- Rate rise could push us back into recession, says BOE chief (Daily Mail)
- Nigeria’s central bank tweaks FX peg again, naira falls (Reuters)
- Kenya MPC to tackle weak shilling and inflation (mygov.go.ke)
- NY Fed’s Dudley: Continued work needed on fincl infrastructure (MNI)
- Turkish central bank sees ‘pronounced’ correction in food prices in June (Reuters)
- How a Fed rates rise creates issues for emerging markets (Roubini/Guardian)
- Zimbabwe: banks called to lower interest rates (allafrica.com)
Monday, June 29, 2015
Kyrgyzstan holds rate as external markets still uncertain
The central bank of the Kyrgyz Republic kept its policy rate steady at 9.50 percent, saying the situation on external financial markets have remained uncertain since last month, and the key factors determining inflation and economic growth remain unchanged.
The National Bank of the Kyrgyz Republic cut its rate by 150 basis points in May in light of the decline in inflation and a slowdown in domestic and foreign demand.
Inflation in Kyrgyzstan slowed further in May to 6.0 percent from 7.9 percent in April for the fourth consecutive month of deceleration and as of June 19 inflation had declined further to 4.8 percent compared with 11.6 percent in January, the central bank said.
The central bank added that high economic growth in January through May of 6.9 percent was driven by the expansion of output at the Kumtor gold mine. Excluding Komtor, Gross Domestic Product growth was 3.9 percent.
In the first quarter of 2015, Kyrgyzstan's GDP expanded by an annual 7.0 percent.
www.CentralBankNews.info
The National Bank of the Kyrgyz Republic cut its rate by 150 basis points in May in light of the decline in inflation and a slowdown in domestic and foreign demand.
Inflation in Kyrgyzstan slowed further in May to 6.0 percent from 7.9 percent in April for the fourth consecutive month of deceleration and as of June 19 inflation had declined further to 4.8 percent compared with 11.6 percent in January, the central bank said.
The central bank added that high economic growth in January through May of 6.9 percent was driven by the expansion of output at the Kumtor gold mine. Excluding Komtor, Gross Domestic Product growth was 3.9 percent.
In the first quarter of 2015, Kyrgyzstan's GDP expanded by an annual 7.0 percent.
www.CentralBankNews.info
Central Bank News Link List - June 29, 2015: ECB Coeure: ‘Grexit’ can no longer be ruled out
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 Coeure: ‘Grexit’ can no longer be ruled out (MNI)
- PBOC loosens monetary policy further by adding cash at auction (Bloomberg)
- Swiss central bank intervened to stabilize franc amid Greek concerns (WSJ)
- Fed’s Dudley says September rate rise possible after better data (Bloomberg)
- China’s central bank seen cutting rates again, just not yet (Bloomberg)
- Interest rate rise could derail recovery, BOE economist warns (Guardian)
- Brazil central bank reaffirms commitment to reduce inflation (WSJ)
- Poland’s PM says central bank, finmin could intervene if zloty weakens (Reuters)
- Romania will maintain rate at 1.75 pc till year-end, analysts say (Romania Journal)
- BOE’s Weale says transcript plans make him “more stilted” in meetings (Reuters)
- Bangko Sentral seen to cut rates in Q3 (Philippine Daily Inquirer)
- PROFILE-Kenyan central bank governor Patrick Njoroge (Reuters)
- IMF paper counters Rajan on easy policy being crises-recipe (PTI)
- Fed should keep rates at zero until mid-‘16 to avoid ‘dark corners’-IMF paper(WSJ)
- Does China’s central bank know what it’s doing? (Bloomberg View)
Angola raises rate 50 bps as inflation accelerates
Angola's central bank raised its benchmark Basic Interest Rate (BNA) by 50 basis points to 9.75 percent, citing accelerating inflation but a slight deceleration in credit to the economy.
The National Bank of Angola (BNA), which has raised its rate by a total of 75 basis points this year after also raising its rate in March, said inflation rose by 0.63 percentage points during May to an annual rate of 8.86 percent, the highest since October 2013.
Preliminary data showed that credit grew by a cumulative 1.83 percent from January through May, below the 1.95 percent rise through April.
The BNA added that the average reference rate of the kwanza depreciated by 0.91 percent from April to May, quoted at 11.84 to the U.S. dollar.
Angola is Africa's second largest crude oil exporter and its export earnings have been hit by last year's decline in oil prices.
It's currency, the kwanza, has been depreciating since July 2014 and on June 5 the central bank said it had devalued the kwanza by about 6 percent. On June 22 the BNA's governor was quoted as saying the central bank would implement measures to ease the shortage of U.S. dollars.
Today the kwanza was trading at 109.97 to the dollar, down 6.5 percent since the start of the year but unchanged since June 5.
In addition to raising the BNA rate, the central bank also raised the standing lending liquidity facility rate to 10.50 percent from 10.0 percent while the absorption rate was maintained at zero percent.
www.CentralBankNews.info
The National Bank of Angola (BNA), which has raised its rate by a total of 75 basis points this year after also raising its rate in March, said inflation rose by 0.63 percentage points during May to an annual rate of 8.86 percent, the highest since October 2013.
Preliminary data showed that credit grew by a cumulative 1.83 percent from January through May, below the 1.95 percent rise through April.
The BNA added that the average reference rate of the kwanza depreciated by 0.91 percent from April to May, quoted at 11.84 to the U.S. dollar.
Angola is Africa's second largest crude oil exporter and its export earnings have been hit by last year's decline in oil prices.
It's currency, the kwanza, has been depreciating since July 2014 and on June 5 the central bank said it had devalued the kwanza by about 6 percent. On June 22 the BNA's governor was quoted as saying the central bank would implement measures to ease the shortage of U.S. dollars.
Today the kwanza was trading at 109.97 to the dollar, down 6.5 percent since the start of the year but unchanged since June 5.
In addition to raising the BNA rate, the central bank also raised the standing lending liquidity facility rate to 10.50 percent from 10.0 percent while the absorption rate was maintained at zero percent.
www.CentralBankNews.info
Sri Lanka holds rates, sees low inflation, stronger activity
Sri Lanka's central bank left its benchmark policy rates unchanged, including the Standing Deposit Facility Rate at 6.0 percent and the Standing Lending Facility Rate at 7.50 percent, saying the prospect of improved growth in advanced economies along with low inflation and low market interest rates were expected to benefit domestic economic activity.
The Central Bank of Sri Lanka, which last cut its policy rate by 50 basis points in April, added that inflation was projected to remain comfortably below 4.0 percent during the rest of the year.
The Central Bank of Sri Lanka issued the following statement:
The Central Bank of Sri Lanka, which last cut its policy rate by 50 basis points in April, added that inflation was projected to remain comfortably below 4.0 percent during the rest of the year.
The Central Bank of Sri Lanka issued the following statement:
This week in monetary policy: Sri Lanka, Kyrgyzstan, Angola, Albania, Romania, Georgia and Sweden
This week (June 29 through July 4) central banks from seven countries or jurisdictions are scheduled to decide on monetary policy: Sri Lanka, Kyrgyz Republic, Angola, Albania, Romania, Georgia and Sweden.
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 be accessed by clicking on This Week.
| WEEK 27 | |||||
| JUN 29-JUL 4, 2015: | |||||
| COUNTRY | MSCI | LATEST | DATE | CURRENT RATE | 1 YEAR AGO |
| SRI LANKA | FM | UNCH. | 29-Jun | 6.00% | 6.50% |
| KYRGYZ REPUBLIC | CUT | 29-Jun | 9.50% | 6.00% | |
| ANGOLA | UNCH. | 29-Jun | 9.25% | 9.25% | |
| ALBANIA | UNCH. | 1-Jul | 2.00% | 2.50% | |
| ROMANIA | FM | CUT | 1-Jul | 1.75% | 3.50% |
| GEORGIA | RAISE | 1-Jul | 5.00% | 4.00% | |
| SWEDEN | DM | UNCH. | 2-Jul | -0.25% | 0.75% |
Sunday, June 28, 2015
Central banks 'fumble in the dark' as they cut rates - BIS
The Bank for International Settlements (BIS), the world's oldest international financial institution, launched a stinging critique of central banks, saying the use of ultra-low interest rates to boost economic growth is ineffective and counterproductive because it encourages further debt and eases the pressure on politicians to undertake necessary reforms.
BIS, known as the central banks' bank, said exceptionally low interest rates, unbalanced global economic growth and high debt are symptomatic of the failure of the policy framework used by central banks and threatens to entrench financial instability and chronic economic weakness.
"Persistent exceptionally low rates reflect the central banks' and market participants' response to the unusually weak post-crises recovery as they fumble in the dark in search of new certainties," said Claudio Borio, head of BIS' respected Monetary and Economic Department since late 2013.
In its annual report, Swiss-based BIS argues that the current malaise in the global economy is largely a result of a failure by policymakers to grasp how financial developments, especially debt, interact with economic activity and inflation in a world with closely connected economies.
"Rather than just reflecting the current weakness, low rates may in part have contributed to it by fueling costly financial booms and busts," said BIS, adding: "The result is too much debt, too little growth and excessively low interest rates. In short, low rates beget lower rates."
BIS, a hub of global central bank cooperation, said central banks' obsession with controlling short-term economic output and inflation must be replaced by policies - both national and international - that rely less on demand management and more on structural policies so as to abandon the debt-fuelled growth model that has become a substitute for meaningful reforms.
The recommendations by BIS are hardly new as they echo the message in last year's annual report. But what stands out this year is a much sharper and more coherent analysis of the failings of the prevailing economic paradigm.
This is a tribute to Borio, one of the pioneers in developing the understanding of financial cycles who became known in the early 2000s for arguing that financial imbalances - gauged by looking at the level of credit and property prices - can build up in an environment of low inflation.
Before the financial crises, which BIS warned about repeatedly, central banks were narrowly focused on keeping inflation low and therefore turned a blind eye to the forces that led to the global financial crises in 2008.
To their credit, many central banks have begun to incorporate financial instability into their policy frameworks, but BIS argues it has to be at the core of the debate over economic policy.
Policymakers still remain focused on closing output gaps and use policies that affect demand to eliminate that gap to achieve full employment and stable inflation. Although financial instability is now recognized as something that has to be addressed, the current cure is largely through prudential policy that is separate from monetary policy.
For BIS, financial cycles provides it with a lens through which it becomes easier to understand why economic growth remains to sluggish and unbalanced five years after the end of the global financial cries despite low or even negative real interest rates, and high or growing debt.
BIS, known as the central banks' bank, said exceptionally low interest rates, unbalanced global economic growth and high debt are symptomatic of the failure of the policy framework used by central banks and threatens to entrench financial instability and chronic economic weakness.
"Persistent exceptionally low rates reflect the central banks' and market participants' response to the unusually weak post-crises recovery as they fumble in the dark in search of new certainties," said Claudio Borio, head of BIS' respected Monetary and Economic Department since late 2013.
In its annual report, Swiss-based BIS argues that the current malaise in the global economy is largely a result of a failure by policymakers to grasp how financial developments, especially debt, interact with economic activity and inflation in a world with closely connected economies.
"Rather than just reflecting the current weakness, low rates may in part have contributed to it by fueling costly financial booms and busts," said BIS, adding: "The result is too much debt, too little growth and excessively low interest rates. In short, low rates beget lower rates."
BIS, a hub of global central bank cooperation, said central banks' obsession with controlling short-term economic output and inflation must be replaced by policies - both national and international - that rely less on demand management and more on structural policies so as to abandon the debt-fuelled growth model that has become a substitute for meaningful reforms.
The recommendations by BIS are hardly new as they echo the message in last year's annual report. But what stands out this year is a much sharper and more coherent analysis of the failings of the prevailing economic paradigm.
This is a tribute to Borio, one of the pioneers in developing the understanding of financial cycles who became known in the early 2000s for arguing that financial imbalances - gauged by looking at the level of credit and property prices - can build up in an environment of low inflation.
Before the financial crises, which BIS warned about repeatedly, central banks were narrowly focused on keeping inflation low and therefore turned a blind eye to the forces that led to the global financial crises in 2008.
To their credit, many central banks have begun to incorporate financial instability into their policy frameworks, but BIS argues it has to be at the core of the debate over economic policy.
Policymakers still remain focused on closing output gaps and use policies that affect demand to eliminate that gap to achieve full employment and stable inflation. Although financial instability is now recognized as something that has to be addressed, the current cure is largely through prudential policy that is separate from monetary policy.
For BIS, financial cycles provides it with a lens through which it becomes easier to understand why economic growth remains to sluggish and unbalanced five years after the end of the global financial cries despite low or even negative real interest rates, and high or growing debt.
Saturday, June 27, 2015
China cuts rate by 25 bps, 4th cut since November 2014
China's central bank cut it benchmark one-year lending rate for the third time this year and lowered the reserve requirements for some banks, saying that China's economy is still facing great downward pressure while domestic inflation remains low and real interest rates below their historical average.
The People's Bank of China (PBOC) cut its key rate by 25 basis points to 4.85 percent for a total cut of 75 basis points this year and by a total of 115 points since November last year when it first started to ease its policy stance in response to the weakening economy.
In addition to cutting its benchmark rate, a move that was expected by many economists, the PBOC also cut its one-year deposit rate by 25 basis points to 2.0 percent and trimmed the reserve ratio for banks that specialize in lending to rural areas and small businesses by 50 basis points.
For financial firms the central bank slashed the amount of money they have to retain at the PBOC by 300 basis points, saying in a statement that this should "enhance internal financing of large enterprises, improve cash flow efficiency, relieve state-owned funds and cost pressures, and support real economic restructuring and development."
The monetary easing comes after an almost 20 percent plunge in Chinese shares in the last two weeks, including Friday's sharp 7.4 percent fall in the Shanghai Composite Index.
China's inflation rate eased to 1.2 percent in May from 1.5 percent in April.
Its Gross Domestic Product decelerated further to growth of only 1.3 percent in the first quarter of this year for annual growth of 7.0 percent, down from 7.3 percent in the previous quarter, but in line with the government's 2015 target of about 7 percent.
www.CentralBankNews.info
The People's Bank of China (PBOC) cut its key rate by 25 basis points to 4.85 percent for a total cut of 75 basis points this year and by a total of 115 points since November last year when it first started to ease its policy stance in response to the weakening economy.
In addition to cutting its benchmark rate, a move that was expected by many economists, the PBOC also cut its one-year deposit rate by 25 basis points to 2.0 percent and trimmed the reserve ratio for banks that specialize in lending to rural areas and small businesses by 50 basis points.
For financial firms the central bank slashed the amount of money they have to retain at the PBOC by 300 basis points, saying in a statement that this should "enhance internal financing of large enterprises, improve cash flow efficiency, relieve state-owned funds and cost pressures, and support real economic restructuring and development."
The monetary easing comes after an almost 20 percent plunge in Chinese shares in the last two weeks, including Friday's sharp 7.4 percent fall in the Shanghai Composite Index.
China's inflation rate eased to 1.2 percent in May from 1.5 percent in April.
Its Gross Domestic Product decelerated further to growth of only 1.3 percent in the first quarter of this year for annual growth of 7.0 percent, down from 7.3 percent in the previous quarter, but in line with the government's 2015 target of about 7 percent.
www.CentralBankNews.info
Friday, June 26, 2015
Ukraine holds rate, sees easier policy in near future
Ukraine's central bank held its benchmark discount rate steady at 30.0 percent to consolidate the positive developments in the money market and stabilize inflationary expectations but added it would soften monetary policy in the near future if inflationary risk subside.
The National Bank of Ukraine (NBU), which last month said it was looking forward to loosening its policy in the near future as the hryvnia's exchange rate stabilizes, welcomed the decline in inflation to 58.4 percent in May from April's 60.9 percent along with narrower fluctuations in the hryvnia's exchange rate and a return of deposits to the banking system.
"Given the stability in the money market and low aggregate demand, the Committee expects continued deceleration of inflation the coming months," the NBU said.
The NBU raised its rate by 16 percentage points this year, most recently in March, and by a total of 23.50 points since April 2014 to protect the value of the hryvnia and curb inflationary pressures.
A plunge in the hryvnia's exchange rate in early February, along with higher rates for housing and some communal services, pushed up inflation sharply, leading the central bank to forecast that inflation would end this year at 48 percent and the International Monetary Fund sees the year ending with inflation at 46 percent.
But the central bank now expects inflation to steadily decline in coming months and reach 12 percent by the end of 2016 as the impact of the devaluation of the hryvnia subsides, prices on world markets remain low, economic activity is below potential and monetary and fiscal policy stays tight.
Last year the hryvnia depreciated almost 50 percent against the U.S. dollar following the outbreak of armed conflict in Eastern Ukraine and the occupation of the Crimean peninsula by pro-Russian forces.
But a cease-fire agreement in late February, rate hikes and administrative measures by the central bank helped put a floor under the hryvnia and today it was trading at 21 to the dollar, largely stable since early March but still down 25 percent this year.
Ukraine's economy has been shrinking since the first quarter of 2014 and its Gross Domestic Product contracted by 5.3 percent in the first quarter of this year from the previous quarter for annual contraction of 17.2 percent, up from 14.8 percent in the fourth quarter of 2014.
Based on the expectation that the truce in the Donetsk and Luhansk regions will hold and business recovers, the central bank expects the economy to slowly recover from the third quarter of this year.
However, this year's GDP is still expected to drop by 9.5 percent, up from 2014's fall of 6.8 percent, before recovering in 2016 to expand by 3.0 percent, the NBU said.
www.CentralBankNews.info
The National Bank of Ukraine (NBU), which last month said it was looking forward to loosening its policy in the near future as the hryvnia's exchange rate stabilizes, welcomed the decline in inflation to 58.4 percent in May from April's 60.9 percent along with narrower fluctuations in the hryvnia's exchange rate and a return of deposits to the banking system.
"Given the stability in the money market and low aggregate demand, the Committee expects continued deceleration of inflation the coming months," the NBU said.
The NBU raised its rate by 16 percentage points this year, most recently in March, and by a total of 23.50 points since April 2014 to protect the value of the hryvnia and curb inflationary pressures.
A plunge in the hryvnia's exchange rate in early February, along with higher rates for housing and some communal services, pushed up inflation sharply, leading the central bank to forecast that inflation would end this year at 48 percent and the International Monetary Fund sees the year ending with inflation at 46 percent.
But the central bank now expects inflation to steadily decline in coming months and reach 12 percent by the end of 2016 as the impact of the devaluation of the hryvnia subsides, prices on world markets remain low, economic activity is below potential and monetary and fiscal policy stays tight.
Last year the hryvnia depreciated almost 50 percent against the U.S. dollar following the outbreak of armed conflict in Eastern Ukraine and the occupation of the Crimean peninsula by pro-Russian forces.
But a cease-fire agreement in late February, rate hikes and administrative measures by the central bank helped put a floor under the hryvnia and today it was trading at 21 to the dollar, largely stable since early March but still down 25 percent this year.
Ukraine's economy has been shrinking since the first quarter of 2014 and its Gross Domestic Product contracted by 5.3 percent in the first quarter of this year from the previous quarter for annual contraction of 17.2 percent, up from 14.8 percent in the fourth quarter of 2014.
Based on the expectation that the truce in the Donetsk and Luhansk regions will hold and business recovers, the central bank expects the economy to slowly recover from the third quarter of this year.
However, this year's GDP is still expected to drop by 9.5 percent, up from 2014's fall of 6.8 percent, before recovering in 2016 to expand by 3.0 percent, the NBU said.
www.CentralBankNews.info
Thursday, June 25, 2015
Central Bank News Link List - June 25, 2015: Israel shekel world’s worst currency after central bank buys
Here's today's
Central Bank News' link list, click through if
you missed the previous link list. The list comprises news about central banks
that is not covered by Central Bank News. The list is updated during the day
with the latest developments so readers don't miss any important news.
- Israel shekel world’s worst currency after central bank buys (Bloomberg)
- PBOC cash injection may dim hopes for stronger easing (WSJ)
- Higher policy rates to push up major sovereign bond yields: Reuters poll
- News analysis: China steps closer to full interest rate liberalization (Xinhua)
- RBI’s Rajan: progress of monsoon “quite strong”; raises hope of rate cut (PTI)
- Swiss central bank braced for ructions if Greece exits euro (Reuters)
- Fed’s Powell: Fed working to boost payments speed, security (MNI)
- Yellen to deliver semi-annual monetary policy report on July 15 (MarketWatch)
- BOE Shafik: Overly gloomy to think growth will remain low (MNI)
- Ghana’s cedi steadies as central bank steps up dollar-selling (Reuters)
- Czech central bank did not discuss negative rates at Thursday meeting (Reuters)
- Philippine central bank cuts 2015, 2016 inflation estimates (Reuters)
- South Korea draws up $13 bln budget boost as MERS bites into growth (Reuters)
- Fed says it is data dependent, but whose data? (Reuters)
- Fed Gov Tarullo: Many factors affecting market liquidity (MNI)
- How ultralow interest rates could devastate pension funds, insurers (MarketWatch)
- Kenya central bank to hold next rate-setting meeting on July 7 (Reuters)
- Forint’s impact on inflation has halved-central bank economists (Reuters)
- China agrees to limit currency interventions, Jacob Lew says (WSJ)
- Spain central bank raises 2015 growth forecast to 3.1% (AFP)
Taiwan maintains rate, inflation seen improving mildly
Taiwan's central bank maintained its benchmark discount rate at 1.875 percent, as expected, saying the domestic economy is growing slowly, the output gap remains negative and the outlook for inflation is expected to "improve mildly."
The Central Bank of the Republic of China (TAIWAN) (CBC), added that spillover effects from diverging monetary policies in advanced economies have led to "large and frequent" movements in international capital markets, but reiterated that it would maintain orderly markets in the event of destabilizing forces.
The CBC, which has held its rate steady since June 2011, also warned of potential threats to the global economy and the stability of international financial markets from volatile cross-border capital movements in connection with a normalization of U.S. monetary policy, continued monetary easing in Europe, Japan and China along with the "lingering uncertainty" over Greek debt talks.
Taiwan's export-dependent economy slowed slightly in the first quarter, partly due to slower growth in China, but the central bank said it expects the global economy to edge up in the second half of the year as the impact of lower oil prices subsides. Domestic demand is projected to be mild, helped by continued growth employment and wages.
The CBC, which has held its rate steady since June 2011, also warned of potential threats to the global economy and the stability of international financial markets from volatile cross-border capital movements in connection with a normalization of U.S. monetary policy, continued monetary easing in Europe, Japan and China along with the "lingering uncertainty" over Greek debt talks.
Taiwan's export-dependent economy slowed slightly in the first quarter, partly due to slower growth in China, but the central bank said it expects the global economy to edge up in the second half of the year as the impact of lower oil prices subsides. Domestic demand is projected to be mild, helped by continued growth employment and wages.
The government's statistics office is forecasting 3.34 percent growth in the second half of this year, up from 3.21 percent in the first half, and full-year growth of 3.28 percent, below its previous forecast of 3.78 percent from March and up 2014's growth of 3.7 percent.
In the first quarter of this year Taiwan's Gross Domestic Product expanded by 0.68 percent from the previous quarter for annual growth of 3.37 percent, down from 3.47 percent.
Taiwan's consumer price inflation rate was minus 0.73 percent in May, the fifth month in a row of deflation, but the CBC expects inflation to rise in the second half of the year as oil prices stabilize and the base effect of the fall in oil prices gradually diminishes.
The government forecasts headline inflation of 0.8 precent in the second half of the year and 0.13 percent for the full year, with core inflation up by an average of 0.81 percent. In March the statistics office forecast 0.26 percent headline inflation for this year.
Unlike most currencies, the Taiwan dollar appreciated against the U.S. dollar from January through late May, but since then it has eased slightly. Today the Taiwan dollar was quoted at 30.9 to the USD for a rise of 2.6 percent since the start of the year.
Czech maintains rate and FX commitment, as expected
The central bank of the Czech Republic held its benchmark two-week repo rate steady at 0.05 percent and reiterated its commitment to intervene in foreign exchange markets to keep the koruna currency below 27 to the euro.
The Czech National Bank (CNB), which has been using the exchange rate as an additional tool to ease monetary policy since November 2013 and is currently committed to keeping the cap on the koruna's exchange rate until at least the second half of 2016.
Last month the CNB raised its inflation and growth forecasts, with inflation seen at 1.5 percent in the second quarter of 2016 and 2.0 percent in the third quarter of 2016.
The forecast for growth this year was unchanged at 2.6 percent while the forecast for 2016 Gross Domestic Product growth was raised to 3.2 percent from 3.0 percent forecast in February.
Inflation in the Czech Republic rose to 0.7 percent in May from 0.5 percent in April while GDP jumped by a higher-than-expected 3.1 percent in the first quarter from the fourth quarter for annual growth of 4.2 percent, up from 1.4 percent in the fourth quarter of last year and the fastest rate since the second quarter of 2008.
The koruna has risen since the release of the strong growth figures, trading at 27.2 to the euro today, the strongest level since November 2013.
Last month the International Monetary Fund said the Czech economy was growing strongly, with both exports and domestic demand performing well and growth is expected to accelerate to 3 percent this year and stabilize around 2.5 percent in the medium term. Inflation is first expected to rise toward the CNB's 2.0 percent target in 2016 and remain low this year.
The Czech National Bank (CNB), which has been using the exchange rate as an additional tool to ease monetary policy since November 2013 and is currently committed to keeping the cap on the koruna's exchange rate until at least the second half of 2016.
Last month the CNB raised its inflation and growth forecasts, with inflation seen at 1.5 percent in the second quarter of 2016 and 2.0 percent in the third quarter of 2016.
The forecast for growth this year was unchanged at 2.6 percent while the forecast for 2016 Gross Domestic Product growth was raised to 3.2 percent from 3.0 percent forecast in February.
Inflation in the Czech Republic rose to 0.7 percent in May from 0.5 percent in April while GDP jumped by a higher-than-expected 3.1 percent in the first quarter from the fourth quarter for annual growth of 4.2 percent, up from 1.4 percent in the fourth quarter of last year and the fastest rate since the second quarter of 2008.
The koruna has risen since the release of the strong growth figures, trading at 27.2 to the euro today, the strongest level since November 2013.
Last month the International Monetary Fund said the Czech economy was growing strongly, with both exports and domestic demand performing well and growth is expected to accelerate to 3 percent this year and stabilize around 2.5 percent in the medium term. Inflation is first expected to rise toward the CNB's 2.0 percent target in 2016 and remain low this year.
Philippines holds rate, inflation still seen in range
The Philippine central bank maintained its key policy rates, including the benchmark overnight borrowing rate at 4.0 percent, saying the latest forecast continue to indicate that inflation is likely to settle in the lower half of its target range this year and in 2016 and inflation expectations remain firmly anchored.
Bangko Sentral ng Pilipinas (BSP), which raised its rate by 50 basis points last year to curb inflation expectations, added that risks to inflation remained broadly balanced, with upside risks from pending rate changes to power and the impact of dry weather from El Nino on food and utility rates.
Downside risks to inflation arise from slower economic global economic growth, BSP said.
Inflation in the Philippines eased to 1.6 percent in May from 2.2 percent in April, slightly below the central bank's target range of 3.0 percent, plus/minus 1 percentage point.
Domestic demand in the Philippines continues to remain firm, supported solid spending by households and capital, and buoyant business confidence. Ample domestic liquidity and planned increase in public spending should further support domestic activity in the months ahead, BSP said.
The Philippine economy slowed by more than expected in the first quarter, triggering speculation that the BSP could ease rates. Gross Domestic Product expanded by only 0.3 percent from the fourth quarter, the weakest pace since the first quarter of 2009. Annual growth was 5.2 percent, down from 6.6 percent in the fourth quarter.
But BSP Governor Amando Tetangco has on several occasions - most recently June 18 - said he saw no need to cut rates as economic activity was expected to accelerate due to government spending on infrastructure and inflation expectations that are within the bank's target range.
Bangko Sentral ng Pilipinas (BSP), which raised its rate by 50 basis points last year to curb inflation expectations, added that risks to inflation remained broadly balanced, with upside risks from pending rate changes to power and the impact of dry weather from El Nino on food and utility rates.
Downside risks to inflation arise from slower economic global economic growth, BSP said.
Inflation in the Philippines eased to 1.6 percent in May from 2.2 percent in April, slightly below the central bank's target range of 3.0 percent, plus/minus 1 percentage point.
Domestic demand in the Philippines continues to remain firm, supported solid spending by households and capital, and buoyant business confidence. Ample domestic liquidity and planned increase in public spending should further support domestic activity in the months ahead, BSP said.
The Philippine economy slowed by more than expected in the first quarter, triggering speculation that the BSP could ease rates. Gross Domestic Product expanded by only 0.3 percent from the fourth quarter, the weakest pace since the first quarter of 2009. Annual growth was 5.2 percent, down from 6.6 percent in the fourth quarter.
But BSP Governor Amando Tetangco has on several occasions - most recently June 18 - said he saw no need to cut rates as economic activity was expected to accelerate due to government spending on infrastructure and inflation expectations that are within the bank's target range.
Wednesday, June 24, 2015
Colombia holds rate, peso fall to have positive effect
Colombia's central bank left its benchmark intervention rate at 4.5 percent, as widely expected, saying second quarter data suggests that the country's economy is continuing to adjust to the new external conditions, including a decline in the terms of trade, with household spending showing moderate growth.
The Central Bank of Colombia, which raised its rate by 125 basis points last year to curb inflation, added that the labor market remains strong while investments should moderate despite dynamic civil works.
Colombia's economy expanded by 0.8 percent in the first quarter from the fourth quarter for annual growth of 2.8 percent, the fourth quarter in a row of decelerating growth. In 2014 Colombia's economy grew by 4.8 percent and the central bank has forecast growth of 3.2 percent this year.
"Meanwhile, it is expected, that, over time, the real devaluation of the peso will have a positive impact on the performance of the sectors that export and compete with imports," the central bank said.
Dollar imports in April showed a significant reduction, the bank said, adding that this process is expected to continue in light of moderate growth in domestic spending, along with the impact of the depreciation of the peso and a fall in some international prices.
Colombia's peso started falling against the U.S. dollar in July 2014 and hit a record low of 2,670 in mid-March before rebounding. Today it was quoted at 2,558 to the dollar, down 7 percent this year.
Colombia's inflation rate eased to a lower-than-expected 4.41 percent in May from 4.64 percent in April due to a deceleration in food prices.
The central bank targets inflation of 3.0 percent, plus/minus one percentage point, and analysts forecast inflation this year to average 3.90 percent.
The Central Bank of Colombia, which raised its rate by 125 basis points last year to curb inflation, added that the labor market remains strong while investments should moderate despite dynamic civil works.
Colombia's economy expanded by 0.8 percent in the first quarter from the fourth quarter for annual growth of 2.8 percent, the fourth quarter in a row of decelerating growth. In 2014 Colombia's economy grew by 4.8 percent and the central bank has forecast growth of 3.2 percent this year.
"Meanwhile, it is expected, that, over time, the real devaluation of the peso will have a positive impact on the performance of the sectors that export and compete with imports," the central bank said.
Dollar imports in April showed a significant reduction, the bank said, adding that this process is expected to continue in light of moderate growth in domestic spending, along with the impact of the depreciation of the peso and a fall in some international prices.
Colombia's peso started falling against the U.S. dollar in July 2014 and hit a record low of 2,670 in mid-March before rebounding. Today it was quoted at 2,558 to the dollar, down 7 percent this year.
Colombia's inflation rate eased to a lower-than-expected 4.41 percent in May from 4.64 percent in April due to a deceleration in food prices.
The central bank targets inflation of 3.0 percent, plus/minus one percentage point, and analysts forecast inflation this year to average 3.90 percent.
Central Bank News Link List - June 24, 2015: Brazil c.bank barely cuts 2016 inflation fcast, 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 c.bank barely cuts 2016 inflation fcast, signals rate hikes (Reuters)
- Israel central bank poised to buy as shekel gains, ILS brokers says (Bloomberg)
- ECB Knot says central bank easing is reaching its limits (Reuters)
- Greece’s Tsipras, creditors struggle to bridge debt gaps (Reuters)
- Indonesia cenbank raises amounts that buyers of cars, homes can borrow (Reuters)
- Thai recovery fragile, policy space should be ‘preserved’: cenbank (Reuters)
- Bank of England MPC could split over timing of first rate rise (City A.M.)
- ECB Visco: Low rates pose risks; no current sign of imbalances (MNI)
- China moves to scrap rule limiting bank loans to 75% of deposits (Bloomberg)
- Australia’s economic growth glory days are over, says IMF (The Age)
- Nigeria central bank curbs FX access for Eurobonds, other items (Reuters)
- Philippines central bank to keep RRP, SDA rates unchanged (Econotimes)
- China likely to get central bank nod for yuan gold fix soon-sources (Reuters)
- Ghana’s central bank says significantly increases dollar sales (Reuters)
- Challenging the emerging markets consensus (Barley/WSJ)
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