National Bank of Serbia Lifts Key Rate 50bps to 12%

The National Bank of Serbia lifted the two-week repurchase rate by 50 basis points to 12% in response to rising inflation. Serbia recorded inflation of 10.3% in December as inflationary pressures increased, driven by 'rising regulated prices, inflationary expectations, higher food and global crude oil prices'.

 

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The People's Bank of China Raised the Required Reserve Ratio Another 50bps

The People's Bank of China [PBOC] raised the required reserves ratio another 50 basis points (placing the rate at 19% from 20 Jan 2011). The move comes just ahead of the December economic statistics releases (due early next week), and follows a spike in inflation to 5.1% in November. Previously the PBOC has commented that it may look to review required reserve ratios on a monthly basis.

 

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Central Bank of Chile Holds Key Policy Rate at 3.25%

The Central Bank of Chile maintained its main monetary policy reference rate at 3.25% in a slight pause on its path to monetary policy normalisation. Chile saw inflation of 3% in December, which is in line with the Bank's policy objectives, but as there remains some upside risks to inflation the Bank could commence tightening again soon.

 

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European Central Bank Maintains Lending Rate at 1.00%

The European Central Bank maintained the main refinancing operations interest rate at 1.00%, and held the marginal lending facility at 1.75%, and deposit facility at 0.25%. The EU last reported inflation at 2.2% in December, ECB Governor Jean-Claude Trichet noted that rising energy commodity prices had started to impact on headline inflation.

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Bank of England Retains Rate at 0.50%, No Changes to Monetary Policy

The Bank of England’s Monetary Policy Committee held the main Bank Rate at 0.5%. The Bank also made no changes to the £200 billion asset purchase program. The United Kingdom last reported inflation of 3.3% in November, which is above the Bank's official inflation target. The full minutes of the monetary policy committee meeting are due to be published at 9.30am on the 26th of January.

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The Bank of Mozambique Raised its Interest Rate 100bps to 16.50%

The Bank of Mozambique raised its key lending rate by 100 basis points to 16.5%. The Bank also raised the interest rate paid on deposits by 100 basis points to 5%, and lifted the required reserve rate by 25 basis points to 9%, with the changes coming into effect on the 7th of February 2011. The Bank noted the moves were intended to be counter-cyclical, to mitigate price rises this year.

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Bank of Korea Raised the 7-day Repo Rate 25bps to 2.75%

The central bank in South Korea raised the benchmark seven-day repurchase rate by 25 basis points to 2.75%. The Bank of Korea noted the rising threat of inflation, explaining their expectation of "inflationary pressures to persist and inflation expectations to increase as the economic upswing continues and international commodity prices rise."

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The Central Bank of Latvia Kept the Refinancing Rate at 3.50%

The central bank of Latvia maintained its benchmark refinancing rate unchanged at 3.50%. The Bank also kept the 7day deposit facility rate unchanged at 0.375% and the overnight deposit facility rate at 0.25%, and made no adjustments to reserve requirements. The Bank noted there was no significant threats to price stability at this time.

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The Bank of Thailand Raised the 1-day Bond Repo Rate 25bps to 2.25%

The Bank of Thailand lifted the 1-day bond repurchase rate by 25 basis points, placing the rate at 2.25%, as expected. The move was driven by rising inflation, with December headline inflation at 3% core inflation (excluding fresh food and fuel) at a 21-month high of 1.4%.

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Central Bank of Armenia Holds Benchmark Rate at 7.25%

The Central Bank of Armenia announced it would leave its benchmark refinancing rate unchanged at 7.25%, as it weighs a slow recovery in aggregate demand with rising inflationary pressures. Armenia has seen rising inflation; driven by a surge in food and energy commodity prices. December inflation was recorded at 9.4% vs 7.5% in November.

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Bank of Angola Cuts Overnight Lending Rate 50bps to 17%

The Banco Nacional de Angola reduced the overnight lending rate by 50 basis points to 17.00%. This follows its previous move where it also cut the rate 50 basis points to 17.50% on the 5th of January. Inflation in Angola was last reported as 16% (October).

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