The Central Bank of the Dominican Republic (BCRD) kept its monetary policy rate at 5.25 percent, confirming it still expects inflation to remain within its target range over the next 24 months.
BCRD also reiterated its view from recent months that the economy was continuing to react favorably to its monetary easing measures and raised its growth forecast for this year to between 5.5 and 6.0 percent from around 5.5 percent, which was forecast in the monetary program for 2018.
The central bank added preliminary data from the monthly indicator of economic activity (IMAE) showed annual growth of 7.0 percent in January, with credit to the private sector up by around 12 percent year-on-year.
The Gross Domestic Product of the Dominican Republic grew by an annual rate of 6.5 percent in the fourth quarter of 2017, up from 3.0 percent in the third quarter.
Last year the economy's growth momentum picked up following a 50 basis point rate cut on July 31 and a lowering of the legal reserve ratio by 2.2 percentage points.
In January the International Monetary Fund forecast 5.5 percent growth this year, supported by reinvigorated credit growth and benign external conditions, with growth remaining around the potential level of 5.0 percent in the medium term.
Inflation eased to 3.86 percent in January from 4.2 percent in December, slightly below the central value of the BCRD's target range of 4.0 percent, plus/minus 1 percentage point.
The IMF said the central bank's inflation-targeting framework was delivering good results and the current neutral monetary policy stance was appropriate.
www.CentralBankNews.info
Wednesday, February 28, 2018
Angola holds rate again after switch to floating FX regime
Angola's central bank left its benchmark BNA rate at 18.0 percent, noting the exchange rate of the euro and U.S. dollar had appreciated by 39.50 percent and 24.88 percent, respectively, against the kwanza during foreign exchange auctions in January.
The National Bank of Angola (BNA), which in January replaced its fixed exchange rate regime with a floating exchange system with bands, said the average exchange rate of the euro at the end of January was 257.39 to the kwanza compared with 184.50 at the end of 2017.
Compared with the dollar, the kwanza's rate was 207.21 end-January, down from 165.92 at the end of 2017, the fixed rate the BNA had used since 2016.
After switching its exchange rate regime on Jan. 4, the BNA on Jan. 9 conducted its first auction of foreign exchange under its new system to help determine a reference rate based on actual demand.
Today's meeting by the BNA's monetary policy meeting is the second following the adoption of the new exchange rate regime. At its policy meeting on Jan. 29, the BNA also maintained its rate after raising it by 200 basis points in November 2017.
The sale of US$945 million to commercial banks, for the purpose of maintaining the supply of consumer goods, led to a 1.51 percent decline in Gross Reserves US$17.717 billion, enough for 7.37 months of imports.
In the credit market, BNA said credit in kwanza rose 0.49 percent but on an annual basis credit contracted by 12.65 percent.
A decline in the value of exports in January from the non-oil sector lead to a 5.39 percent drop in exports from December while imports fell by 3.0 percent. But year-on-year the trade balance rose by 47.24 percent due to a 19.5 percent increase in exports and a16.3 percent fall in imports.
Angola's inflation rate eased to 22.72 percent in January from 23.67 percent in December.
www.CentralBankNews.info
The National Bank of Angola (BNA), which in January replaced its fixed exchange rate regime with a floating exchange system with bands, said the average exchange rate of the euro at the end of January was 257.39 to the kwanza compared with 184.50 at the end of 2017.
Compared with the dollar, the kwanza's rate was 207.21 end-January, down from 165.92 at the end of 2017, the fixed rate the BNA had used since 2016.
After switching its exchange rate regime on Jan. 4, the BNA on Jan. 9 conducted its first auction of foreign exchange under its new system to help determine a reference rate based on actual demand.
Today's meeting by the BNA's monetary policy meeting is the second following the adoption of the new exchange rate regime. At its policy meeting on Jan. 29, the BNA also maintained its rate after raising it by 200 basis points in November 2017.
The sale of US$945 million to commercial banks, for the purpose of maintaining the supply of consumer goods, led to a 1.51 percent decline in Gross Reserves US$17.717 billion, enough for 7.37 months of imports.
In the credit market, BNA said credit in kwanza rose 0.49 percent but on an annual basis credit contracted by 12.65 percent.
A decline in the value of exports in January from the non-oil sector lead to a 5.39 percent drop in exports from December while imports fell by 3.0 percent. But year-on-year the trade balance rose by 47.24 percent due to a 19.5 percent increase in exports and a16.3 percent fall in imports.
Angola's inflation rate eased to 22.72 percent in January from 23.67 percent in December.
www.CentralBankNews.info
Mauritius maintains rate but raises inflation forecast
The central bank of Mauritius left its benchmark repurchase rate at 3.50 percent, but raised its forecast for inflation this year to 4.0 percent from 3.5 percent forecast in November, noting the rise in inflation in recent months.
The Bank of Mauritius (BOM), which last September cut its rate for the first time since July 2016, said the rise in inflation since the previous meeting of its monetary policy committee in November was mainly due to transitory supply-side shocks, with a surge in vegetables prices in January due to adverse weather following a rise in domestic petroleum prices in December 2017.
Inflation in the Indian Ocean island of Mauritius rose to 6.2 percent in January from 4.2 percent in December and 3.6 percent in November.
However, BOM added that core measures of inflation "remained subdued."
Earlier in 2017 inflation accelerated due to higher the prices of alcohol, tobacco and diesel oil and hit a 5-year peak of 6.4 percent in June.
The economy of Mauritius grew by 3.6 percent in the third quarter of last year, down from 4.2 percent in the second quarter and 3.7 percent in the third quarter of 2016, BOM said, adding growth was supported by higher investment activity and stable consumption spending.
"The MPC expects that the economic recovery would be sustained in 2018," BOM said, adding the baseline projections for GDP growth this year is 4.0 percent, down from 4.2 percent earlier forecast.
The Mauritian rupee, which tumbled in 2015, has been rising steadily since early 2017 but weakened this month.
Today the rupee was trading at 33.85 to the U.S. dollar, marginally up from 33.9 at the start of the year and up 5.9 percent since the start of 2017.
The Bank of Mauritius (BOM), which last September cut its rate for the first time since July 2016, said the rise in inflation since the previous meeting of its monetary policy committee in November was mainly due to transitory supply-side shocks, with a surge in vegetables prices in January due to adverse weather following a rise in domestic petroleum prices in December 2017.
Inflation in the Indian Ocean island of Mauritius rose to 6.2 percent in January from 4.2 percent in December and 3.6 percent in November.
However, BOM added that core measures of inflation "remained subdued."
Earlier in 2017 inflation accelerated due to higher the prices of alcohol, tobacco and diesel oil and hit a 5-year peak of 6.4 percent in June.
The economy of Mauritius grew by 3.6 percent in the third quarter of last year, down from 4.2 percent in the second quarter and 3.7 percent in the third quarter of 2016, BOM said, adding growth was supported by higher investment activity and stable consumption spending.
"The MPC expects that the economic recovery would be sustained in 2018," BOM said, adding the baseline projections for GDP growth this year is 4.0 percent, down from 4.2 percent earlier forecast.
The Mauritian rupee, which tumbled in 2015, has been rising steadily since early 2017 but weakened this month.
Today the rupee was trading at 33.85 to the U.S. dollar, marginally up from 33.9 at the start of the year and up 5.9 percent since the start of 2017.
Tuesday, February 27, 2018
Argentina holds rate, 'extreme' caution before any cuts
Argentina's central bank left its monetary policy rate at 27.25 percent for the second time in a row and poured cold water on hopes for further rate cuts in the short term, saying it would "exercise extreme caution, awaiting signs of disinflation compatible with the path sought before relaxing its monetary policy."
Today's statement by the Central Bank of Argentina (BCRA) is more hawkish than its last monetary policy statement from Feb. 14 when it merely said it would "act with caution" given mixed signs about inflation.
BCRA cut its policy rate twice in January by a total of 150 basis points after the government raised the 2018 inflation target to 15 percent from 8-12 percent, allowing the central bank to pursue a looser policy stance.
However, inflation and inflation expectations have continued to rise, with national consumer prices up by 1.8 percent in January for an annual rise of 25.0 percent, up from 24.8 percent in December. Core inflation was steady at 21.1 percent.
BCRA attributed the rise in inflation to higher prices of agricultural and petroleum products, with the depreciation of the peso playing a role.
Data suggest that inflation in February, both on the general level and the core components, will be above the January values and those of the fourth quarter of 2017, BCRA added.
In late December Mauricio Macri's government pushed back its goal of lowering to inflation to 5 percent by one year to 2020 and raised its 2018 target to 15 percent from a previous 8-12 percent.
For 2019 Argentina's inflation target is 10 percent.
The International Monetary Fund has forecast 2018 inflation of 16.3 percent, 2019 inflation of 11.8 percent and 10.0 percent in 2020.
After stabilizing between August and November 2017, Argentina's peso has been weakening since early December - pushing up import prices - and was trading at 20.2 to the U.S. dollar today, down 7.9 percent this year and down 22 percent since early 2017.
www.CentralBankNews.info
Today's statement by the Central Bank of Argentina (BCRA) is more hawkish than its last monetary policy statement from Feb. 14 when it merely said it would "act with caution" given mixed signs about inflation.
BCRA cut its policy rate twice in January by a total of 150 basis points after the government raised the 2018 inflation target to 15 percent from 8-12 percent, allowing the central bank to pursue a looser policy stance.
However, inflation and inflation expectations have continued to rise, with national consumer prices up by 1.8 percent in January for an annual rise of 25.0 percent, up from 24.8 percent in December. Core inflation was steady at 21.1 percent.
BCRA attributed the rise in inflation to higher prices of agricultural and petroleum products, with the depreciation of the peso playing a role.
Data suggest that inflation in February, both on the general level and the core components, will be above the January values and those of the fourth quarter of 2017, BCRA added.
In late December Mauricio Macri's government pushed back its goal of lowering to inflation to 5 percent by one year to 2020 and raised its 2018 target to 15 percent from a previous 8-12 percent.
For 2019 Argentina's inflation target is 10 percent.
The International Monetary Fund has forecast 2018 inflation of 16.3 percent, 2019 inflation of 11.8 percent and 10.0 percent in 2020.
After stabilizing between August and November 2017, Argentina's peso has been weakening since early December - pushing up import prices - and was trading at 20.2 to the U.S. dollar today, down 7.9 percent this year and down 22 percent since early 2017.
www.CentralBankNews.info
Monday, February 26, 2018
Kyrgyzstan maintains rate and neutral policy stance
Kyrgyzstan's central bank left its key rate, the discount rate, at 5.0 percent, and retained its neutral policy stance, saying it would "take appropriate" monetary policy measures depending on inflation and the economy.
The National Bank of the Kyrgyz Republic (NBKR), which has maintained its rate since December 2016, added that it expects inflation to remain within its medium-term target of 5.0 to 7.0 percent as world food markets are stable while domestic consumer demand is being restored.
Kyrgyzstan's inflation rate eased to 3.2 percent in January and to 3.4 percent as of Feb. 16 from 3.7 percent in December.
Kyrgyzstan's economy is strengthening on the back of domestic demand with Gross Domestic Product in January rising by 2.3 percent, excluding the Kumtor gold mine. Including Kumtor, GDP expanded by 3.4 percent.
In the third quarter of last yer, Kyrgyzstan's economy grew 5.0 percent year-on-year, down from 6.0 percent, for 2017 growth of 4.5 percent as remittances surged 25 percent in U.S. dollar terms.
The Kyrgistani som has been buffeted in recent months with an excess supply of currency, prompting several NBKR interventions. The International Monetary Fund in January called on the central bank to restrict its interventions to solely smoothing out excessive volatility so the exchange rate can act as a shock absorber and thus deliver macroeconomic benefits.''
www.CentralBankNews.info
The National Bank of the Kyrgyz Republic (NBKR), which has maintained its rate since December 2016, added that it expects inflation to remain within its medium-term target of 5.0 to 7.0 percent as world food markets are stable while domestic consumer demand is being restored.
Kyrgyzstan's inflation rate eased to 3.2 percent in January and to 3.4 percent as of Feb. 16 from 3.7 percent in December.
Kyrgyzstan's economy is strengthening on the back of domestic demand with Gross Domestic Product in January rising by 2.3 percent, excluding the Kumtor gold mine. Including Kumtor, GDP expanded by 3.4 percent.
In the third quarter of last yer, Kyrgyzstan's economy grew 5.0 percent year-on-year, down from 6.0 percent, for 2017 growth of 4.5 percent as remittances surged 25 percent in U.S. dollar terms.
The Kyrgistani som has been buffeted in recent months with an excess supply of currency, prompting several NBKR interventions. The International Monetary Fund in January called on the central bank to restrict its interventions to solely smoothing out excessive volatility so the exchange rate can act as a shock absorber and thus deliver macroeconomic benefits.''
www.CentralBankNews.info
South Korea maintains rate and accommodative stance
South Korea's central bank kept is base rate steady at 1.50 percent, as expected, and poured cold water on any expectations that it is getting closer to another rate hike by reiterating its guidance from last month that it will maintain its accommodative policy stance as inflationary pressures from demand "will not be high for the time being."
The Bank of Korea (BOK), which in November last year raised its rate for the first time since June 2011, also confirmed that it still expects inflation to slowly rise from the low to mid-single digits and gradually approach its 2.0 percent target level from the second half of 2018.
South Korea's inflation rate eased to 1.0 percent in January from 1.5 percent in December, with the BOK last month forecasting that inflation would average 1.7 percent this year then rise to 2.0 percent in 2019.
Next year inflation is seen close to 2.0 percent target as demand side pressures start to rise in synch with the domestic economy. Core inflation, which excludes energy and groceries, is forecast at 1.8 percent this year and 2.0 percent in 2019.
South Korea's economy is showing solid expansion with exports rising and consumption and investments showing favorable changes, BOK said, adding construction investment had fallen.
Gross Domestic Product grew by an annual 3.0 percent in the fourth quarter of last year for annual growth of 3.1 percent, up from 2016's 2.8 percent.
The BOK in January raised its 2018 growth forecast to 3.0 percent from 2.9 percent, with its exports continuing to benefit from the global recovery while private consumption is also expected to improve from last year.
For 2019 the BOK expects 2.9 percent growth, close to the economy's potential growth rate.
The Bank of Korea (BOK), which in November last year raised its rate for the first time since June 2011, also confirmed that it still expects inflation to slowly rise from the low to mid-single digits and gradually approach its 2.0 percent target level from the second half of 2018.
South Korea's inflation rate eased to 1.0 percent in January from 1.5 percent in December, with the BOK last month forecasting that inflation would average 1.7 percent this year then rise to 2.0 percent in 2019.
Next year inflation is seen close to 2.0 percent target as demand side pressures start to rise in synch with the domestic economy. Core inflation, which excludes energy and groceries, is forecast at 1.8 percent this year and 2.0 percent in 2019.
South Korea's economy is showing solid expansion with exports rising and consumption and investments showing favorable changes, BOK said, adding construction investment had fallen.
Gross Domestic Product grew by an annual 3.0 percent in the fourth quarter of last year for annual growth of 3.1 percent, up from 2016's 2.8 percent.
The BOK in January raised its 2018 growth forecast to 3.0 percent from 2.9 percent, with its exports continuing to benefit from the global recovery while private consumption is also expected to improve from last year.
For 2019 the BOK expects 2.9 percent growth, close to the economy's potential growth rate.
South Korea's won strengthened steadily last year but has gave up some of its gains in February. Today the won was trading at 1,070.2 to the U.S. dollar, down 0.4 percent this year.
Mozambique cuts rate another 150 bps as inflation slows
Mozambique's central bank lowered its monetary policy rate (MIMO) by a further 150 basis points to 18.0 percent, citing the continuing decline of inflation and its forecasts that inflation will be in single digits by the end of this year.
The Bank of Mozambique (BM) has now cut its MIMO rate, which replaced the standing facility rate as its signal rate in April 2017, by 375 basis points. The last rate cut was in December.
BM said its monetary policy committee (CPMO) would continue to monitor economic and financial data and "may take the necessary corrective action" before its next meeting on April 30.
BM also cut the rates on its permanent lending facility (CSF) and the deposit facility (FPD) by 150 basis points to 19.0 percent and 12.50 percent, respectively.
But the rate on banks' foreign currency liabilities with BM was raised by a sharp 800 basis points to 22.0 percent, with effect from the March 7 period, to help dampen volatility in the exchange rate of Mozambique's metical.
The reserve ratio on banks' domestic liabilities was retained at 14.0 percent.
Mozambique's inflation rate fell to 3.84 percent in January for the ninth consecutive monthly decline in inflation, and down from 20.56 percent in January 2017.
BM expects inflation to remain in single digits by the end of 2018 but added the risks remain high, including uncertainties from flooding in January that led to 11 deaths in the northern part of Mozambique. Last week heavy rains also triggered the collapse of a large garbage mound in the outskirts of the capital of Maputo, leading to the death of at least 17 people.
Other risks to the inflation outlook stem from public debt, the volatility of commodity prices and exchange rates. Public debt rose to 104.7 billion metical in February from 98.5 billion in December.
The metical has weakened since mid-January, with CPMO attributing this to the combined effect of volatility in major currencies along with a shift to a greater openness in the regulation of capital.
On Jan. 16 the U.S. dollar was quoted at 58.92 to the metical but this rate fell to 61.39 by Feb. 23, a drop of 4 percent.
Mozambique's economy "continues to be moderate," BM said, adding Gross Domestic Product grew by 3.7 percent in the fourth quarter of 2017, up from 2.9 percent in the third, with the economic climate index showing a recovery in the fourth quarter.
BM has forecast 4.7 percent growth in 2017, up from 3.3 percent in 2016.
Foreign demand is continuing the help dampen the impact of slower domestic demand with rising exports helping narrow Mozambique's 2017 current account deficit by US$1.367 billion from 2016.
Mozambique's international reserves dropped by US$96.3 million by mid-February, mainly due to BM's sale of $87.8 million in the interbank market, most of which was to settle foreign debt, while purchases amount to $6.2 million.
The reserves amounted to $3.188 billion, enough for 7.2 months of imports, excluding large-scale transactions.
www.CentralBankNews.info
The Bank of Mozambique (BM) has now cut its MIMO rate, which replaced the standing facility rate as its signal rate in April 2017, by 375 basis points. The last rate cut was in December.
BM said its monetary policy committee (CPMO) would continue to monitor economic and financial data and "may take the necessary corrective action" before its next meeting on April 30.
BM also cut the rates on its permanent lending facility (CSF) and the deposit facility (FPD) by 150 basis points to 19.0 percent and 12.50 percent, respectively.
But the rate on banks' foreign currency liabilities with BM was raised by a sharp 800 basis points to 22.0 percent, with effect from the March 7 period, to help dampen volatility in the exchange rate of Mozambique's metical.
The reserve ratio on banks' domestic liabilities was retained at 14.0 percent.
Mozambique's inflation rate fell to 3.84 percent in January for the ninth consecutive monthly decline in inflation, and down from 20.56 percent in January 2017.
BM expects inflation to remain in single digits by the end of 2018 but added the risks remain high, including uncertainties from flooding in January that led to 11 deaths in the northern part of Mozambique. Last week heavy rains also triggered the collapse of a large garbage mound in the outskirts of the capital of Maputo, leading to the death of at least 17 people.
Other risks to the inflation outlook stem from public debt, the volatility of commodity prices and exchange rates. Public debt rose to 104.7 billion metical in February from 98.5 billion in December.
The metical has weakened since mid-January, with CPMO attributing this to the combined effect of volatility in major currencies along with a shift to a greater openness in the regulation of capital.
On Jan. 16 the U.S. dollar was quoted at 58.92 to the metical but this rate fell to 61.39 by Feb. 23, a drop of 4 percent.
Mozambique's economy "continues to be moderate," BM said, adding Gross Domestic Product grew by 3.7 percent in the fourth quarter of 2017, up from 2.9 percent in the third, with the economic climate index showing a recovery in the fourth quarter.
BM has forecast 4.7 percent growth in 2017, up from 3.3 percent in 2016.
Foreign demand is continuing the help dampen the impact of slower domestic demand with rising exports helping narrow Mozambique's 2017 current account deficit by US$1.367 billion from 2016.
Mozambique's international reserves dropped by US$96.3 million by mid-February, mainly due to BM's sale of $87.8 million in the interbank market, most of which was to settle foreign debt, while purchases amount to $6.2 million.
The reserves amounted to $3.188 billion, enough for 7.2 months of imports, excluding large-scale transactions.
www.CentralBankNews.info
Israel maintains rate as inflation expectations rise
Israel's central bank left its key interest rate at 0.10 percent, as widely expected, saying inflation expectations have recently risen although inflation is likely to decline temporarily in coming months.
The Bank of Israel (BOI), which has maintained its rate since March 2015, also affirmed its guidance that it intends to maintain its accommodative monetary policy "as long as necessary in order to entrench the inflation environment within the target range."
BOI targets inflation of 1.0 to 3.0 percent and expects inflation to enter its target range in the second half of this year, with the central bank then raising its rate to 0.25 percent end-year.
Israel's inflation rate eased to 0.1 percent in January 2018 after inflation was positive most of 2017 - the first time in three years - albeit below the bank's target. In December the inflation rate was 0.4 percent.
Despite the temporary drop in inflation in coming months for seasonal reasons and due to government price reductions, the BOI said the depreciation of the shekel in the past month - to the extent that it persists - along with higher wages, will support the return of inflation to the target range.
In the past month inflation expectations derived from capital markets had risen to 0.8 percent for the coming year, BOI said.
Last year Israel's economy performed well, helped by exports, with Gross Domestic Product up by a seasonally-adjusted annual 3.6 percent in the fourth quarter, and employment was full.
"Economic activity continues to expand in line with the potential growth rate," said BOI, which has forecast growth this year and 2019 by around 3.5 percent.
After steadily rising since March 2015, the shekel has weakened this year, with the BOI saying it lost 3.1 percent in terms of the effective exchange rate and by 1.6 percent against the U.S. dollar since the last meeting of its monetary policy committee on Jan. 10.
Today the shekel was trading at 3.49 to the dollar, only slightly down from 3.47 at the start of the year.
The Bank of Israel (BOI), which has maintained its rate since March 2015, also affirmed its guidance that it intends to maintain its accommodative monetary policy "as long as necessary in order to entrench the inflation environment within the target range."
BOI targets inflation of 1.0 to 3.0 percent and expects inflation to enter its target range in the second half of this year, with the central bank then raising its rate to 0.25 percent end-year.
Israel's inflation rate eased to 0.1 percent in January 2018 after inflation was positive most of 2017 - the first time in three years - albeit below the bank's target. In December the inflation rate was 0.4 percent.
Despite the temporary drop in inflation in coming months for seasonal reasons and due to government price reductions, the BOI said the depreciation of the shekel in the past month - to the extent that it persists - along with higher wages, will support the return of inflation to the target range.
In the past month inflation expectations derived from capital markets had risen to 0.8 percent for the coming year, BOI said.
Last year Israel's economy performed well, helped by exports, with Gross Domestic Product up by a seasonally-adjusted annual 3.6 percent in the fourth quarter, and employment was full.
"Economic activity continues to expand in line with the potential growth rate," said BOI, which has forecast growth this year and 2019 by around 3.5 percent.
After steadily rising since March 2015, the shekel has weakened this year, with the BOI saying it lost 3.1 percent in terms of the effective exchange rate and by 1.6 percent against the U.S. dollar since the last meeting of its monetary policy committee on Jan. 10.
Today the shekel was trading at 3.49 to the dollar, only slightly down from 3.47 at the start of the year.
Sunday, February 25, 2018
This week in monetary policy: Israel, Mozambique, Kyrgyzstan, South Korea, Hungary, Argentina, Bulgaria, Gambia, Angola, Dominican Rep., Ukraine & Moldova
This week - February 25 through March 3 - central banks from 12 countries or
jurisdictions are scheduled to decide on monetary policy: Israel, Mozambique, Kyrgyz Republic, South Korea, Hungary, Argentina, Bulgaria, Gambia, Angola, Dominican Republic, Ukraine and Moldova.
Following table includes the name of the country, the date of the next policy
decision, the current policy rate, the result of the last policy decision, the
change in the policy rate year to date, the rate one year ago, and the
country’s MSCI classification.
The
table is updated when the latest decisions are announced and can always
accessed by clicking on This Week.
| WEEK 9 | ||||||
| FEB 25- MAR 3, 2018: | ||||||
| COUNTRY | DATE | RATE | LATEST | YTD | 1 YR AGO | MSCI |
| ISRAEL | 26-Feb | 0.10% | 0 | 0 | 0.10% | DM |
| MOZAMBIQUE | 26-Feb | 19.50% | -150 | 0 | 23.25% | |
| KYRGYZSTAN | 26-Feb | 5.00% | 0 | 0 | 5.00% | |
| SOUTH KOREA | 27-Feb | 1.50% | 0 | 0 | 1.25% | EM |
| HUNGARY | 27-Feb | 0.90% | 0 | 0 | 0.90% | EM |
| ARGENTINA | 27-Feb | 27.25% | 0 | -150 | 24.75% | FM |
| BULGARIA | 28-Feb | 0.00% | 0 | 0 | 0.00% | FM |
| GAMBIA | 28-Feb | 15.00% | 0 | 0 | 23.00% | |
| ANGOLA | 28-Feb | 18.00% | 0 | 0 | 16.00% | |
| DOMINICAN REP. | 28-Feb | 5.25% | 0 | 0 | 5.50% | |
| UKRAINE | 1-Mar | 16.00% | 150 | 150 | 14.00% | FM |
| MOLDOVA | 1-Mar | 6.50% | 0 | 0 | 9.00% | |
Wednesday, February 21, 2018
Jamaica cuts rate another 25 bps, inflation risks balanced
Jamaica's central bank lowered its policy rate by another 25 basis points to 2.75 percent and while it still expects inflation to remain within its target range over the next 8 quarters it turned more optimistic by saying the risks to this forecast were now balanced as compared with last month when it said the risks were skewed to the downside.
The Bank of Jamaica (BOJ), which on July 1, 2017 adopted the overnight deposit rate as its new signal rate instead of the rate on 30 certificates of deposit, has now cut its key rate by a total of 100 basis points since July when the rate was cut to 3.75 percent.
The BOJ said the rate cut was aimed at supporting "accelerated expansion in credit and economic output" while the persistence of excess liquidity in the domestic money market continues to signal reductions in market interest rates.
Jamaica's inflation rate declined to 4.8 percent in January from 5.2 percent in December and the BOJ expects inflation to remain within its 4.0 to 6.0 percent target over the next two years, with the outlook reflecting its expectation of continued fiscal consolidation and low inflation expectations.
Jamaica's economy remains sluggish although forecasts show a "modest acceleration" in growth over the next two years, the BOJ said.
Jamaica's Gross Domestic Product grew by an annual 0.8 percent in the third quarter of last year, up from a contraction of 0.1 percent in the second quarter.
One upside risk to inflation stems from "overheating" in the U.S., which boosts demand for Jamaica's goods and services. While this may prompt tighter monetary conditions in the U.S., the BOJ said this impact on the domestic economy would be eased by a fall in Jamaica's sovereign risk premium.
The Bank of Jamaica (BOJ), which on July 1, 2017 adopted the overnight deposit rate as its new signal rate instead of the rate on 30 certificates of deposit, has now cut its key rate by a total of 100 basis points since July when the rate was cut to 3.75 percent.
The BOJ said the rate cut was aimed at supporting "accelerated expansion in credit and economic output" while the persistence of excess liquidity in the domestic money market continues to signal reductions in market interest rates.
Jamaica's inflation rate declined to 4.8 percent in January from 5.2 percent in December and the BOJ expects inflation to remain within its 4.0 to 6.0 percent target over the next two years, with the outlook reflecting its expectation of continued fiscal consolidation and low inflation expectations.
Jamaica's economy remains sluggish although forecasts show a "modest acceleration" in growth over the next two years, the BOJ said.
Jamaica's Gross Domestic Product grew by an annual 0.8 percent in the third quarter of last year, up from a contraction of 0.1 percent in the second quarter.
One upside risk to inflation stems from "overheating" in the U.S., which boosts demand for Jamaica's goods and services. While this may prompt tighter monetary conditions in the U.S., the BOJ said this impact on the domestic economy would be eased by a fall in Jamaica's sovereign risk premium.
Zambia cuts rate another 50 bps on steady inflation
Zambia's central bank continued to ease its monetary policy stance by cutting its policy rate and the reserve requirement to support economic growth and promote a stable financial system, and forecast inflation in the lower bound of its inflation target over the next eight quarters.
The Bank of Zambia (BOZ) cut its policy rate by another 50 basis points to 9.75 percent and has now cut it by 575 points since embarking on an easing cycle in February 2017.
The statutory reserve ratio was also cut by another 300 basis points to 5.0 percent, bringing the total reduction in the ratio to 13.50 percentage points since February 2017.
"Changes in the Policy Rate will continue to be guided by inflation outcomes and forecasts as well as progress in fiscal consolidation," the BOZ said.
The rate cut comes at a time of uncertainty over whether Zambia - whose economy is starting to rebound after the rise in copper prices and good rains - will obtain a $1.3 billion extended credit facility from the International Monetary Fund (IMF).
In August 2017 discussions between the IMF and Zambia were put on hold after the IMF said the government's borrowing plans threatened debt sustainability, requesting "credible borrowing plans."
But on Feb. 16 the IMF again rejected the government's borrowing plan.
"Against this background, future program discussions can only take place once the Zambian authorities implement credible measures that ensure debt contraction is consistent with a key program objective of stabilizing debt dynamics and putting them on a declining trend in the medium term," the IMF said last week.
Meanwhile, Zambia said on Saturday that it aimed to borrow directly from China's government and rearrange its loans from Chinese companies.
Zambia's total public debt at the end of August 2017 was US$12.45 billion - including $7.5 billion in external debt - and has said it wants to refinance $2.8 billion of Eurobonds issued between 2012 and 2015 to cut the cost of debt service.
Zambia's president also replaced the finance and mining ministers last week.
Despite uncertainty over Zambia's relations with the IMF, the exchange rate of the kwacha has remained firm and was trading at 9.89 to the U.S. dollar today, up 1.9 percent this year. However, its dollar-denominated bonds have been hit, with yields up 170 basis points to 7.94 percent, according to Bloomberg.
Zambia's inflation rate rose slightly to 6.2 percent in January from 6.1 percent in December with inflation in recent months easing on a sustained supply of food.
Over the next eight quarters BOZ expects inflation to trend around the lower bound of its 6-8 percent target range, with higher crude oil prices and lower agricultural output posing upside risks.
"Economic activity has continued to improve, but growth remains below potential," the BOZ said, adding the economic outlook remains positive, with output in mining and energy continuing to expand as overall business conditions improved.
For 2018 and 2019 the BOZ forecast economic growth of 5.0 percent and 5.4 percent, respectively, with higher electricity generation expected to support increase production. For 2017 the BOZ has estimated growth of 4.2 percent after 2016 growth of 3.4 percent.
Preliminary data for 2017 indicate a government fiscal deficit of 6.1 percent of Gross Domestic Product, below the 7.0 percent target.
"Containing the budget deficit and the overall debt, including domestic arrears, to sustainable levels remain critical to consolidating macroeconomic stability," BOZ said.
www.CentralBankNews.info
The Bank of Zambia (BOZ) cut its policy rate by another 50 basis points to 9.75 percent and has now cut it by 575 points since embarking on an easing cycle in February 2017.
The statutory reserve ratio was also cut by another 300 basis points to 5.0 percent, bringing the total reduction in the ratio to 13.50 percentage points since February 2017.
"Changes in the Policy Rate will continue to be guided by inflation outcomes and forecasts as well as progress in fiscal consolidation," the BOZ said.
The rate cut comes at a time of uncertainty over whether Zambia - whose economy is starting to rebound after the rise in copper prices and good rains - will obtain a $1.3 billion extended credit facility from the International Monetary Fund (IMF).
In August 2017 discussions between the IMF and Zambia were put on hold after the IMF said the government's borrowing plans threatened debt sustainability, requesting "credible borrowing plans."
But on Feb. 16 the IMF again rejected the government's borrowing plan.
"Against this background, future program discussions can only take place once the Zambian authorities implement credible measures that ensure debt contraction is consistent with a key program objective of stabilizing debt dynamics and putting them on a declining trend in the medium term," the IMF said last week.
Meanwhile, Zambia said on Saturday that it aimed to borrow directly from China's government and rearrange its loans from Chinese companies.
Zambia's total public debt at the end of August 2017 was US$12.45 billion - including $7.5 billion in external debt - and has said it wants to refinance $2.8 billion of Eurobonds issued between 2012 and 2015 to cut the cost of debt service.
Zambia's president also replaced the finance and mining ministers last week.
Despite uncertainty over Zambia's relations with the IMF, the exchange rate of the kwacha has remained firm and was trading at 9.89 to the U.S. dollar today, up 1.9 percent this year. However, its dollar-denominated bonds have been hit, with yields up 170 basis points to 7.94 percent, according to Bloomberg.
Zambia's inflation rate rose slightly to 6.2 percent in January from 6.1 percent in December with inflation in recent months easing on a sustained supply of food.
Over the next eight quarters BOZ expects inflation to trend around the lower bound of its 6-8 percent target range, with higher crude oil prices and lower agricultural output posing upside risks.
"Economic activity has continued to improve, but growth remains below potential," the BOZ said, adding the economic outlook remains positive, with output in mining and energy continuing to expand as overall business conditions improved.
For 2018 and 2019 the BOZ forecast economic growth of 5.0 percent and 5.4 percent, respectively, with higher electricity generation expected to support increase production. For 2017 the BOZ has estimated growth of 4.2 percent after 2016 growth of 3.4 percent.
Preliminary data for 2017 indicate a government fiscal deficit of 6.1 percent of Gross Domestic Product, below the 7.0 percent target.
"Containing the budget deficit and the overall debt, including domestic arrears, to sustainable levels remain critical to consolidating macroeconomic stability," BOZ said.
www.CentralBankNews.info
Sunday, February 18, 2018
This week in monetary policy: Paraguay, Fiji and Colombia. Mozambique postponed
This week - February 18 through February 24 - central banks from 3 countries or
jurisdictions are scheduled to decide on monetary policy: Paraguay, Fiji and Colombia.
Mozambique's central bank was scheduled to hold a monetary policy meeting on Feb. 22 but this meeting was postponed to Feb. 26.
Following table includes the name of the country, the date of the next policy
decision, the current policy rate, the result of the last policy decision, the
change in the policy rate year to date, the rate one year ago, and the
country’s MSCI classification.
The
table is updated when the latest decisions are announced and can always
accessed by clicking on This Week.
| WEEK 8 | ||||||
| FEB 18- FEB 24, 2018: | ||||||
| COUNTRY | DATE | RATE | LATEST | YTD | 1 YR AGO | MSCI |
| PARAGUAY | 21-Feb | 5.25% | 0 | 0 | 5.50% | |
| FIJI | 22-Feb | 0.50% | 0 | 0 | 0.50% | |
| COLOMBIA | 23-Feb | 4.50% | -25 | -25 | 7.25% | EM |
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