Central Bank Watch

South African Reserve Bank Repo Rate Cut

July 20, 2017

South Africa’s central bank interest rate was cut for the first time in several years, and the decision drew dissents favoring no change by two of the Monetary Policy Committee’s six members. South African GDP unexpectedly contracted in the first quarter in a broad-based way. The growth outlook has worsened. Excess product supplies will consequently […] More

European Central Bank Espouses Patience and Persistence

July 20, 2017

The latest Governing Council statement expresses growing confidence in growth and a return of inflation to target but fails to define when policy stimulus will be throttled back and the possible timetable for such a process. The signals are mixed. The statement reiterates that quantitative stimulus will continue for as long as necessary and doesn’t […] More

Bank of Japan: Same old, Same old

July 20, 2017

Japanese monetary policy, although institutionally independent, suffers from chronically rigid thinking. The latest policy review produced 1) unchanged policy settings,2) another 7-2 vote with Kiuchi and Sato objecting to the majority’s policy preference for the same reasons that they have dissented at countless prior meetings, and 3) yet another outward push in the collective projected […] More

Central Reserve Bank of Peru’s Reference Rate Cut to 18-Month Low of 3.75%

July 13, 2017

Peru’s central bank rate 25-basis point cut this month was the second one of 2017 and returns the level to its lowest point since mid-December 2015 to mid-January of 2016. Both headline and core inflation are falling according to a released statement, and they are within the 1-3% target range. Expected inflation is also creeping […] More

Bank Negara Malaysia

July 13, 2017

Malaysia’s central bank policy rate was maintained at 3.0%, its rate for the past year. There had been cuts of 25 basis points in both July 2014 and July 2016. Expectations of a possible rate hike later this year have faded as a spike in inflation is being unwound gradually. A statement released today indicates […] More

Bank of Korea

July 13, 2017

Thirteen months have passed since the last base rate change in South Korea, and although central bank officials bumped projected 2017 economic growth up somewhat to 2.8%, the base rate was left at 1.25%. Five cuts spaced out from April 2014 to June 2016 had previously halved the policy interest rate. A statement released today […] More

First Bank of Canada Policy Interest Rate Hike Since September 2010

July 12, 2017

In the initial emergence from the Great Recession, the Bank of Canada raised interest rates three times while the Fed stood pat, lifting the overnight policy rate by 25 basis points each in June, July and September 2010. Like many central banks that jumped the gun, part of that tightening proved premature and had to […] More

Bank of Israel

July 10, 2017

After having cut Israel’s policy interest rate by 75 basis points per year in 2011-14, monetary officials sanctioned one final 10-basis point reduction in February 2015 to the present level of 0.10%. The latest policy review concluded as it has been doing for some time that an accommodative stance needs to be maintained for “as […] More

National Bank of Serbia

July 10, 2017

Starting in April of 2013, the Executive Board of the NSB cut Serbia’s policy interest rate by a total of 825 basis points from 12.25% to 4.0%. The reductions included 350 basis points in 2015 and, most recently, a pair a 25-bp cuts in February and July of 2016. A statement released today after the […] More

National Bank of Poland

July 5, 2017

Poland’s 1.5% reference rate was retained after the latest review. It’s been at that level since 50-basis point cuts in January and March 2015. The rate had dropped to 2.5% from 4.75% between November 2012 and July 2013. Inflation and unit labor cost growth are moderate. While projecting inflation hovering near 2.0% and drifting a […] More