Central Bank Watch
Central Reserve Bank of Peru: Surprise Rate Cut
January 15, 2015
Peru’s central bank became the latest central bank to react to the disinflationary implications of plunging world oil prices. The monetary policy rate was sliced to 3.25% from 3.5%, the third such reduction since July and the fourth since November 2013. A 4.25% level had been maintained from May 2011 until November 2013. Previous rate […] More
Central Bank Watch
Central Bank of Chile Stays in a Wait and See Mode
January 15, 2015
Following eight 25-basis point policy interest rate cuts between October 2013 and October 2014, the Board of the Central Bank of Chile adopted a wait and see posture. Inflation of 4.6% is falling amid weak production and demand but remains above the 2-4% target range. A statement released today after the January Board meeting noted […] More
Deeper Analysis
German Real GDP
January 15, 2015
Real economic activity expanded 1.5% in 2014 following minuscule gains of 0.4% in 2012 and 0.1% in 2013. Growth last year was led by a 1.1% rise in personal consumption, which accounted for 40% of the overall growth rate. Business spending on machinery, equipment and construction rose about 3.5% and accounted for 0.5 percentage points […] More
Central Bank Watch
Swiss National Bank Removes Cap on CHF/EUR Cross Rate
January 15, 2015
After the central bank had fallen to virtually zero, SNB officials on September 6, 2011 imposed a ceiling on the franc’s cross rate of 1.2000 per euro, which had been maintained until now through threatened and actual unlimited intervention. That subordination of monetary policy to an exchange rate target was ended today for a variety […] More
Central Bank Watch
Reserve Bank of India: First Interest Rate Cut since May 2013
January 15, 2015
RBI Governor Rajan has made good on a promise in December’s review that an intra-meeting rate cut was possible in early 2015 if the momentum of inflation, which started to ease after last July, continued in that direction. The central bank today announced cuts of 25 basis points in the repo rate to 7.75% and […] More
Central Bank Watch
Serbian Monetary Policy Now Paused
January 15, 2015
The Executive Board of the National Bank of Serbia left its policy interest rate at 8.0%. Inflation has been below the 2.5-5.5% target since March 2014, and the policy rate was accordingly reduced three times in 2014 (May, June and November, each time by 50 basis points). A statement released today says this about the […] More
Central Bank Watch
Bank Indonesia Keeps 7.75% Reference Rate and Reviews 2014 Trends at First Policy Meeting of 2015
January 15, 2015
A statement released by the Board of Governors today notes A weaker-than-expected and altogether uneven global recovery. A slowdown last year of domestic economic growth in Indonesia. An improved balance of payments during 2014, with the rupiah falling against the dollar but rising against many other currencies. Inflation in 2014 was 8.36% (yoy), lower than […] More
New Overnight Developments Abroad - Daily Update
Swiss National Bank Lights a Firestorm and India’s Central Bank Also Surprises
January 15, 2015
There’s been a whole lot of shaking going on in world financial markets overnight. Dollar/Swissie plunged 14.2%, and Swiss equities have slumped 9.5%. The trigger for these big moves was the Swiss National Bank’s abandonment of its 1.2000 franc per euro ceiling, which was imposed initially on September 6, 2011. The cost of intervention was […] More
