Central Bank Watch

Bank of Mexico Interest Rate Cut Again

November 15, 2019

The Governing Board of the Bank of Mexico voted 5-2 in favor of a third consecutive 25-basis point interest rate cut, which becomes 7.5%. The two dissenters wanted a 50-basis point reduction. The combined 75-basis point reduction remains small in comparison with 500 basis points of tightening during 2016-18. Officials released a statement that notes […] More

Reserve Bank of New Zealand Didn’t Cut Interest Rates Further

November 13, 2019

There’s already been one central bank surprise, this from the Reserve Bank of New Zealand. Officials there had been expected to extend their easing. New Zealand’s Official Cash Rate previously this year had been reduced by 25 basis points in May and 50 basis points to a mere 1.0% in August, but policymakers decided not […] More

Central Reserve Bank of Peru

November 8, 2019

The Central Reserve Bank of Peru late yesterday announced a 25-basis point reduction of its reference interest rate to 2.25%. This follows a similar cut in August. There were also two 25-basis point cuts in the first quarter of 2018 and three such cuts in the second half of 2017. A released statement observes weakness […] More

Bank of England Policy Left As Is But Reveals a Dovish Sign

November 7, 2019

Sterling’s slide reflects one of the days biggest surprises. While the Bank of England Monetary Policy Committee left unchanged existing stocks of corporate bond purchases, U.K. gilt purchases, and the 0.75% bank rate, the vote by the 9-person committee on the interest rate level drew dissents favoring a cut by Michael Saunders and Jonathan Haskel. […] More

Serbian Central Bank Rate Cut

November 7, 2019

the National Bank of Serbia’s executive board did make a change in its policy rate, cutting such by 25 basis points to 2.25%. This is the third such cut since July. A statement of explanation cites weakening inflationary pressure and the easing actions of other central banks but asserts that Serbian domestic macroeconomic indicators continue […] More

Bank of Thailand’s Interest Rate Reduced 25 Basis points to 1.25%

November 6, 2019

By a 5-2 vote, the Monetary Policy Committee of the Bank of Thailand cut its 1-day repo rate by 25 basis points to a 9-year low of 1.25%. There were two dissents favoring no change in rate. It is hoped that lower central bank rates will counter the drag of an appreciated baht this year […] More

Another Icelandic Central Bank Rate Cut

November 6, 2019

The Central Bank of Iceland’s 7-day term rate was chopped 25 basis points to 3.0%. Along with earlier reductions of 25 bps in October, August and June and a 50-basis point cut in May, that brings this year’s total decline to 150 basis points. A released statement suggests that the rate may now be appropriately […] More

Bank of Japan Leaves Policy Settings as Is but Cuts Projected Growth and Inflation

October 31, 2019

The Bank of Japan’s latest policy review, a meeting lasting five hours and 18 minutes over two days, produced no change in policy settings: a negative 0.1% short-term policy interest rate, a targeted 10-year JGB yield of “around zero percent,” and plans to buy about JPY 80 tln of JGB’s annually. This month’s policy review […] More

Third Brazilian Rate Cut of the Cycle

October 30, 2019

The Central Bank of Brazil’s Selic Rate was cut 50 basis points to 5.0%. The decision was unanimous and followed 50-bp reductions announced July 31 and September 19. In a released statement, the policymaking committee characterized core inflation as comfortable. The Committee judges that this decision reflects its baseline scenario for prospective inflation and the […] More

FOMC Statement Introduces More Ambiguity in Forward Guidance

October 30, 2019

A key sentence after the previous two rate cuts announced on July 31 and September 18th had read, “As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain […] More