Archive for December 8th, 2011

Central Bank Watch

Mixed Message from the ECB, and Markets Weaken in Response

December 8, 2011

The good news was a rate cut of 25 basis points, downwardly revised forecasts of inflation, and a number of unconventional measure modifications to facilitate the transmission of policy.  The ECB, for instance, will now do a few three-year fixed rate refinancing operations, exceeding the prior limit of a one-year maturity.  Rules on eligible collateral […] More

Central Bank Watch

Bank of England: No Surprises

December 8, 2011

The Monetary Policy Committee launched a new GBP 75 billion round of long-term asset purchases in October 2011 that will not be completed until late January 2012.  The 0.5% Bank Rate level since March 2009 has long been declared the technically appropriate floor.  As expected, the Bank of England did not make further policy changes […] More

Central Bank Watch

Peru Central Bank Rate Kept at 4.25%

December 8, 2011

Peruvian monetary policy has been paused since May 2011 following ten hikes totaling 300 basis points squeezed into a 12-month period.  A statement from the Central Reserve Bank of Peru contains standard boiler plate anti-inflationary stuff, tying future policy moves to “the evolution of inflation and its determinants.”  The statement blames temporary factors for a […] More

Central Bank Watch

Indonesian Monetary Policy Left Unchanged this Month After Rate Cuts of October and November

December 8, 2011

Bank Indonesia’s reference interest rate was left at 6.0% after this month’s policy meeting. Such was reduced by 25 basis points in October and 50 bps last month, and it is now lower than the post-Great Recession low of 6.5% maintained from August 2009 until a 25-bp rate hike in February 2011.  During the Great […] More

New Overnight Developments Abroad - Daily Update

Firmer Yen Ahead of ECB and Bank of England Decisions

December 8, 2011

Analysts are projecting a likely ECB rate cut at 12:45 GMT.  Just in from the Bank of England is confirmation of no change in its monetary policy settings of a 0.5% Bank Rate and a GBP 275 billion ceiling on asset buying. There have been some bad vibrations out of Brussels, suggesting continuing disagreement over […] More

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