Central Bank Watch
Mexico and Chile Monetary Policy Reviews
July 17, 2010
The Mexican overnight interbank funding rate, 4.5% since July 2009, was left unchanged as expected on Friday. The rate was reduced in total by 375 basis points last year. The Mexican economy is recovering, but on-year first-quarter growth of 4.3% was just half as much as in Brazil and five-eighths as much as in Argentina. [...] More
Lessening Urgency to Tighten Turkish Interest Rates
July 15, 2010
A new statement from the Central Bank of the Republic of Turkey kept the mantra that current policy interest rate levels can be maintained for “some time” and that low levels are probable for “a long time.” The new benchmark one-week repo rate thus stays at 7.0%, and the old target instrument, the overnight borrowing [...] More
Unchanged Central Bank Policy in The Philippines Continues
July 15, 2010
Several Asian central banks, but not yet Bangko Sentral NG Pilipinas, have started to raise their interest rates. The Filipino overnight borrowing and lending rates were left at 4% and 6%, respectively, where such have been since cuts of 25 basis points in July 2009. Those reductions had been the eighth by the central bank [...] More
No Surprises from the Bank of Japan
July 15, 2010
By a unanimous 9-0 vote, the fully-staffed BOJ Policy Board kept its overnight uncollateralized interest rate at 0.1% and promised to maintain an “extremely accommodative financial environment” to combat “the critical challenge of overcoming deflation.” The rate has not been modified since a cut of 20 basis points in December 2008, nor has it exceeded [...] More
Bank of Japan Preview
July 14, 2010
No changes are anticipated from the monthly meeting of the BOJ’s Policy Board on Wednesday and Thursday. Because rates were already very low, officials implemented only 40 basis points of cuts to 0.1% in the autumn of 2008. Outright purchases of JGBs have been kept at 1.8 trillion yen per month since March 2009, and [...] More
Thailand Gets a Central Bank Rate Hike
July 14, 2010
Interest rate normalization has begun in yet another Asian economy. The Bank of Thailand had delayed that decision because of domestic political unrest. But officials now conclude that any adverse impact on tourism, consumption or investment had been surprisingly mild and temporary. That’s the message of a statement released today after a 25-basis point increase [...] More
Bank of Canada Releases Two Corporate Surveys
July 12, 2010
The Bank of Canada’s first rate increase of the cycle on June 1st was justified by evidence of economic recovery. Even though pausing in April, real GDP still expanded 5.0% annualized over the latest six reported months. Employment climbed 1.5% in the year to June, and service sector jobs soared 7.5% annualized last quarter. Two [...] More
Bank of Korea
July 9, 2010
Bowing to the reality of a strong domestic recovery — real GDP grew in the first quarter by over 8% both from 4Q09 annualized and from 1Q09 — the Bank of Korea finally implemented a rate increase of 25 basis points in its seven-day repo rate to 2.25%. However, in deference to slack property prices, [...] More
Central Reserve Bank of Peru Tightens Again
July 8, 2010
A statement from monetary officials following today’s third straight monthly increase of 25 basis points in the reference lending rate deleted the prediction contained in the May and June rate hike explanations that this move needn’t foreshadow a sequence of moves, but officials did warn that the uncertain impact of global financial market turmoil could [...] More
Trichet Spouts Same Old Stuff
July 8, 2010
European monthly statements evolve much more slowly and smoothly than market perceptions. Traders don’t like the monotony of these monthly staged events but feel compelled to stay tuned, lest Trichet utter a market-moving surprise. In the first hour following the start of today’s conference, the euro had appreciated fractionally further against the dollar, challenging but [...] More
