Central Bank Watch
Swedish Riksbank Repo Rate Lifted After Majority Vote
September 2, 2010
The first tightening on July 1 doubled the repo rate to 0.5%, and today’s action raises such by an additional 25 basis points. The Riksbank is one of few central banks to publish a predicted future path of its own policy rate. The trajectory — 0.9% in the fourth quarter, 2.1% in 3Q11, 3.1% in [...] More
Malaysian Monetary Tightening Paused
September 2, 2010
Following hikes of 25 basis points each this past March, May and July, Bank Negara Malaysia left its key policy rate at 2.75% today and released a message that called the rate level appropriate and accommodative and did not speak about the need for rate normalization. While domestic demand has been strong, export growth is [...] More
ECB Retains Enhanced Credit Support and Key Rate Structure
September 2, 2010
The Governing Council made no change in the configuration of its short-term interest rates. They are a 1.0% refinancing rate flanked symmetrically by a 0.25% deposit rate and a 1.75% marginal lending rate. The refinancing rate has been steady for the past 16 months, having earlier been cut in seven steps from 4.25% prior to [...] More
Brazilian Selic Rate Left at 10.75%
September 1, 2010
The interest rate policy board, Copom, at the Banco Central do Brasil paused the tightening of its key interest rate as analysts anticipated. Hikes implemented of 75 bps on April 28, another 75 bps on June 9 and 50 bps on July 21 had reversed two-fifths of the cuts between January 2009 and July 2009. [...] More
Pundits Digesting Nuances of Signals from the Fed, Bank of Japan and ECB
August 31, 2010
Among the most telling comments in the August FOMC minutes is the sentence, “Members generally saw both employment and inflation as likely to fall short of levels consistent with the dual mandate for longer than had been anticipated.” Often with a mandate to maintain price stability but also maximize jobs, there is a conflict with [...] More
Russian Key Interest Rate Left Unchanged at 7.75%
August 31, 2010
Bank Rossii left the Russian refinancing rate at a record low of 7.75%. It has been at that level since a 25-basis point cut effective last June 1st. From April 2009 until then, there were fourteen reductions totaling 475 basis points. Consumer price inflation of 5.5% in the year to July was less than half [...] More
Bank of Japan Expands Liquidity-Enhancing Facility to Encourage Bank Lending
August 30, 2010
An unscheduled three-hour policy meeting was most noteworthy for actions not taken. A statement released by the Policy Board noted recently unstable currency and equity markets but said nothing about planned currency intervention or steps explicitly aimed at the stock market. Nor did officials change the key interest rate of 0.1% since December 2008 or [...] More
Philippines’ Central Bank Rates Unchanged
August 26, 2010
The overnight borrowing rate of Bangko Sentral ng Pilipinas will remain at 4.0% as analysts expected. A fairly sanguine statement released today by officials called monetary policy settings, which were last changed in July 2009, appropriate because of contained inflation and anchored inflation expectations. The CPI is expected to stay confined to its target ranges [...] More
Thailand Gets a Second 25-Basis Point Monetary Tightening
August 25, 2010
The Bank of Thailand’s one-day repo rate was raised to 1.75% following a 25-basis point initial increase to 1.50% announced July 14. Officials released a statement noting that second quarter GDP growth of 0.2% from 1Q and 9% from 2Q09 had been faster than expected. Sectors that could have been hurt by earlier political unrest [...] More
Hungary and Poland Monetary Policy Decisions: No Changes
August 24, 2010
Yesterday the Magyar Nemzeti Bank announced no change in Hungary’s central bank Base Rate of 5.25%. Fourteen reductions totaling 625 basis points between November 2008 and April 2010 had been implemented earlier. There have been no hikes yet, but some informal consideration of such appears to have been entertained, since a new statement from officials [...] More
