Central Bank Watch

Indonesia’s Fourth Central Bank Interest Rate Hike Since Mid-May

August 15, 2018

In the face of a wider current account deficit in Indonesia, intensifying global trade tensions, and Turkey’s crisis, which makes many emerging economies more vulnerable, Bank Indonesia’s key 7-day reverse repo rate was lifted by another 25 basis points to 5.50%. The deposit facility and lending facility rates also went up 25 basis points to […] More

Filipino Monetary Response Escalated Amid Rising Inflation

August 9, 2018

A May central bank rate hike in May — the first hike of the overnight reverse repo rate since 2014 — was followed one month later by a second tightening. Both increases were 25 basis points in size, which these days is the most frequent incremental change favored by central bankers. But after meeting this […] More

Bank of Mexico Decides Not to Raise Interest Rate after Latest Policy Review

August 2, 2018

The Governing Board kept its overnight interbank interest rate at 7.75% but observed in a released statement that “since the last monetary policy decision, the balance of risks to the forecasted trajectory of inflation remains biased upwards, in an environment of high uncertainty.” There had been two 25-basis point hikes this year — in February […] More

Czech National Bank Lifts 2-Week Repo Rate to 1.25% from 1.00%

August 2, 2018

Developing economies like that of the Czech Republic depend on capital inflows, and these have diminished as a result of U.S. President Trump’s protectionist agenda. Currencies have depreciated, forcing central banks to raise interest rates and counter imported inflation. Today’s Czech National Bank rate increase is the fifth of the cycle, following moves of 20 […] More

Bank of England Tightens a Second Time

August 2, 2018

Following up on an initial interest rate hike last November, the Monetary Policy Committee by unanimous vote raised Britain’s Bank rate from 0.50% to 0.75%, highest since March 2009. The policy governing the Bank of England’s holdings of gilts and corporate bonds was not changed, and a released statement gave the following forward guidance to […] More

Brazilian and Indian Monetary Policy Decisions

August 1, 2018

Central Banks in two of the four BRIC economies held monetary policy reviews. Coincidentally, while the Brazilian Selic rate was left unchanged at 6.50%, the Indian repo rate was lifted 25 basis points to rest also at 6.50%. Previously, the Selic rate was lowered sharply by 50 basis points in 2016, 675 bps last year […] More

FOMC Leaves Interest Rate Unchanged, Upgrades GDP and Personal Consumption Assessments

August 1, 2018

Today’s statement sets the stage for a likely eighth interest rate hike at the next FOMC meeting in September. Assessments of overall growth and the key consumption component of demand were each upgraded to “strong.” Policy continues to be characterized as accommodative and thereby supportive of “strong labor market conditions and a sustained return to […] More

FOMC Preview

August 1, 2018

The federal funds target in the current campaign of rate normalization has undergone seven 25-basis point increases, their dates being December 2015, December 2016, March, June and December of 2017, March 2018 and, most recently, on June 13th at its previous meeting. Today’s announcement at 14:00 EDT will not be accompanied by new forecasts nor […] More

Bank of Japan

July 31, 2018

The Bank of Japan did not change its policy interest rates of negative 0.1% on overnight Policy-Rate balances or about zero percent on the 10-year JGBs. In controlling the yield curve, officials still expect to purchase about 80 trillion yen of JGBs per year, and the quantitative settings for purchases and/or holdings of ETFs, J-Reits, […] More

No Change in ECB Policy Stance

July 26, 2018

The Governing Council’s fifth of eight scheduled meetings in 2018 ended as expected with no change in its policy stance. A released statement is upbeat about prospects for inflation rising back to its targeted pace but balances that confidence with the continuing assertion that it is conditioned upon a continuing stimulative policy — The underlying strength […] More