Three Asian Central Banks Announce Interest Rate Decisions
May 12, 2009
- The Bank of Korea left its key 7-day repo rate at 2.0% for a third straight month but pre-announced that an accommodative stance will be maintained for the time being. The rate earlier had been cut twice by a total of 100 basis points last October and once each by 25 bps in November, 100 bps in December, 50 bps in January and 50 bps in February. Officials see signs of a moderating downturn such as spotty upticks in some real estate markets but released a statement that observes continuing economic weakness, financial market problems, and subsiding general inflation.
- The National Bank of Kazakhstan cut the official financing rate by 50 basis points to 9.0%, the lowest level since December 2007. The economy of this oil producer was hit hard by the slump in prices for that export and by the world economic slump. In contrast to growth of almost 9% in 2007, Kazakhstan is now flirting with a recession, and inflation has trended down to 8.8% despite a 19% depreciation of the tenge.
- The National Bank of Tajikistan reduced its refinancing rate by 200 basis points to 10.0% just 3 months after implementing a 150-basis point cut from 13.5% at the start of 2009. Growth in this central Asian nation has been clobbered by slumping remittances from ex-patriots working in Russia.
Copyright 2009 Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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