Archive for June 12th, 2014

Central Bank Watch

Bank Indonesia BI Rate Left Unchanged

June 12, 2014

The BI central bank interest rate has been 7.5% since a 25-basis point hike last November.   The level had previously not been so high since April 2009, and today’s statement affirmed the view that policy is consistent with attaining inflation objectives and a shrinking the current account deficit.  A four-year low in Indonesia’s economic growth […] More

Central Bank Watch

Bank of Korea Retains 2.5% Key Interest Rate

June 12, 2014

Three 25-basis point cuts of the South Korean seven-day repo rate implemented in July 2012, October 2012 and May 2013 constitute the last changes in monetary policy.  Thirteen monthly meetings subsequently have ended with essentially the same message that South Korea’s output gap will stay negative, although narrowing gradually, for the time being and that […] More

Central Bank Watch

Third Interest Rate Hike since March by Reserve Bank of New Zealand

June 12, 2014

In a widely expected move, New Zealand’s Official Cash Rate was lifted from 3.0% to 3.25%.  Similar moves were also announced on March 15 and April 24.  In light of a stronger-than-desired exchange rate, it was thought, however, that the accompanying remarks by Governor Wheeler might signal a pause in tightening, but that was not […] More

Foreign Exchange Insights and Next Week

What Divergent Monetary Policy Biases Suggest…. Or So We’re Told

June 12, 2014

Students are taught that unsynchronized monetary policies promote currency volatility.  For bored currency market watchers, it ought to be heartening to see significant divergences among the major central bank policy biases for the first time since the European Central Bank raised interest rates in July 2008.  Now it is the ECB whose stance is most […] More

New Overnight Developments Abroad - Daily Update

Kiwi Jumps Over 1% After New Zealand Official Cash Rate Hike

June 12, 2014

The New Zealand dollar advanced 1.4% net against its U.S. counterpart and got as strong as USD 0.8690 following the Reserve Bank of New Zealand’s scheduled monetary policy meeting.  While a third 25-basis point tightening since March had been anticipated, investors reacted most to the accompanying guidance that points to greater-than-assumed further tightening in the […] More

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