Central Bank Watch
Chile
May 18, 2012
Officials at the Central Bank of Chile did not change the 5.0% monetary policy rate. This was the fourth consecutive monthly meeting to conclude with a decision of no interest rate change. From a Great Recession low of 0.50%, 275 basis points of increase were implemented in 2010 and a further 200 bps of increase [...] More
Iceland’s Interest Rate Hike
May 16, 2012
Many analysts were surprised by today’s announced increase of the Bank of Iceland’s 7-day collateralized rate to 5.5%. The three prior increases on March 21, November 2, and August 17, 2011 were by 25 basis points, and the escalating euro debt crisis dissuaded some from expecting any Icelandic move now. A statement on the Sedlabanki [...] More
Malaysian Monetary Policy Not Changed
May 11, 2012
Officials at the Bank of Malaysia decided not to change the overnight policy interest rate, which has been at 3.0% since a 25-basis point hike in May 2011. Three similarly-sized hikes were implemented from a base of 2.0% in March 2010, May 2010, and July 2010. A Monetary Policy Statement on Bank Malaysia Negara’s web [...] More
Peruvian Monetary Policy Unchanged
May 11, 2012
The last reference interest rate hike by the Board of the Central Reserve Bank of Peru in May 2011 culminated a series of ten 25-basis point increases totaling 300 basis points from 1.25% to 4.25% that was begun a year earlier in May 2010. It is now May 2012, and yesterday’s Board announcement kept the [...] More
Norges Bank Doesn’t Loosen Norwegian Monetary Policy Any Further
May 10, 2012
Norway’s overnight deposit rate had been cut by 50 basis points last December and 25 basis points in March of this year, reversing three of the four 25-bp hikes implemented between October 2009 and May 2011. At 1.5% the key rate is historically low but not as much so as key interest rate levels in [...] More
Bank of Russia: Monetary Policy Settings Stay on Hold
May 10, 2012
Bank Rossii implemented three changes of its refinancing rate last year, hikes of 25 basis points each in February and April and a cut of 25 bps on December 23rd. After this month’s meeting, the Board of Directors left the key rate at 8.0%, its level since the cut in December. Officials are balancing President [...] More
Bank Indonesia
May 10, 2012
The Indonesian reference interest rate was left at 5.75% again, but a statement released by officials indicated, as did the previous April statement, a readiness to tighten in time: “Bank Indonesia is going to raise interest rate of monetary operation instrument and continue to absorb rupiah excess liquidity to contain short term inflationary pressure and [...] More
No Change in South Korean Monetary Policy
May 10, 2012
The Bank of Korea once again retained a 3.25% Base Rate level. From a Great Recession low of 2.0% maintained from February 2009 until July 2010, five increases of 25 basis points each were enacted but none since June of 2011. Both core and headline inflation eased in April to 1.6% and 2.5%, respectively. The [...] More
Bank of England Leaves Policy Settings Unchanged
May 10, 2012
The Bank of England retained a 0.5% Bank Rate and did not increase the GBP 325 billion Asset Purchase Plan further. This was the expected result, although some analysts that more quantitative easing might be forthcoming. In a typical boilerplate statement for occasions when no changes are made, officials simply indicated the size and timing [...] More
Bank of England Preview: Between a Rock and a Hard Place
May 9, 2012
The term stagflation applies to Britain much more accurately than to any other major industrial economy. The U.K. economy’s second recession in five years has been confirmed after GDP contracted in both 4Q11 and the first quarter of 2012, the latter by 0.8% at an annualized rate. Only half of the calendar year GDP declines [...] More
