Central Bank Watch
Bank of Russia Retains a 7.5% Base Interest Rate
June 16, 2014
The policy bias, however, remains skewed toward further restraint. The base rate had been increased by 150 basis points in early March and another 50 basis points in last April, and a statement explaining today’s decision warns In case existing inflation risks materialize, and threats to medium-term inflation targets emerge, the Bank of Russia will […] More
New Overnight Developments Abroad - Daily Update
Markets Watching Sunni Insurgency in Iraq with Great Apprehension
June 16, 2014
Further violence in Iraq kept the WTI oil price near $107 per barrel, lifted gold by 0.5% to $1,280.90 per ounce, and raised the yen to 137.71 per euro, strongest since February 6. Sterling is unchanged unbalance against the dollar but earlier surpassed $1.70 for the first time since August 2009, touching a high of […] More
Foreign Exchange Insights and Next Week
Next Week
June 13, 2014
Central Bank meetings are being held next week in Norway, Switzerland, Thailand, the Philippines, Russia and, most importantly, by the Federal Reserve, which will unveil new macroeconomic and individual interest rate forecasts. There will be a press conference Wednesday led by Chair Janet Yellen. Ironically, her predecessor Ben Bernanke also speaks that day in Zurich. […] More
Central Bank Watch
Central Bank of Chile Leaves Key Interest Rate Unchanged as Expected
June 13, 2014
Chile’s central bank rate is currently 4.0%, same as Peru’s, even though Chilean inflation of 4.7% is 1.1 percentage points above the Peruvian rate. Also, whereas Peru’s rate has been reduced just once in the past four-plus years (by 25 basis points last November), Chile’s monetary policy rate was sliced five times by that increment […] More
Central Bank Watch
Central Reserve Bank of Peru: Again No Rate Change
June 13, 2014
The last change in Peru’s monetary policy reference rate was a cut of 25 basis points last November to 4.0%, and that was the first reduction in over four years. For the seventh straight subsequent meeting and as analysts were expecting, policy was left unchanged after the June Board meeting. A released statement attributes above-target […] More
Central Bank Watch
Bank of Japan Holds ‘Em
June 13, 2014
The Bank of Japan Board released a statement after its June meeting that reaffirmed existing policy and reads nearly identically to the prior meeting’s statement released May 21. Current policy settings were first announced in early April 2013 as the first pillar among three that form Abenomics. Stimulative fiscal policy is the second pillar, and […] More
New Overnight Developments Abroad - Daily Update
Scent of Monetary Restraint Coming to the U.K.
June 13, 2014
The annual Mansion House Speech from Bank of England Governor Mark Carney suggested that the first hike of the central bank interest rate may happen sooner than markets are assuming and possibly before year-end. Actions against house price inflation appear imminent but will be introduced in a measured way. Three other central banks overnight left […] More
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
