Central Bank Watch

South African Reserve Bank Tightens

November 22, 2018

The South African Reserve Bank surprised markets with an unexpected 25-basis  point increase of the repo rate to 6.75% after their sixth and final planned policy review of 2018. This was the first rate change since a cut of 25 basis points last March. Officials want to head of rising inflation expectations amid inflation stubbornly […] More

Bank of Mexico Tightens to Contain Inflation

November 16, 2018

The Bank of Mexico raised the overnight interbank rate by another 25 basis points, citing significant peso depreciation since the last policy review, concerns regarding the incoming administration’s policy intentions, above target inflation, indications of higher expected inflation, recent downgrades by some ratings agencies of Mexico’s debt rating outlook, and likely future increases in global […] More

A Fifth Straight Filipino Central Bank Interest Rate Hike

November 15, 2018

A desire to counter perceived upside inflation risks such as the rice tariffication bill, the suspension of the oil excise tax, wage pressures, and elevated inflation expectations justified a further hike of Bangko Sentral ng Pilipinas’ overnight reverse repo rate to 4.75% from 4.5%, according to a released central bank statement. Officials also felt obliged to […] More

Bank Indonesia Tightens Stance Further

November 15, 2018

The Indonesian central bank board of governors announced several changes: The 7-day reverse repo rate, deposit facility rate, and lending facility rate were hiked 25 basis points to 6.0%, 5.25%, and 6.75%. The key reverse repo rate has been lifted 7 times since mid-May for a total of 2 percentage points. Reserve requirements were also […] More

FOMC Keeps 2-2.25% Federal Funds Target Range as Expected

November 8, 2018

With no press conference planned, the Federal Open Market released a statement at 14:00 EST (15:00 GMT) that is very similar to the previous meeting’s one, when policy was tightened. As expected this time the fed funds target was left unchanged, but no doubt was left about more rate normalization as officials reiterated the clause “in […] More

FOMC Preview

November 8, 2018

FOMC policy has become an epitome of predictability in rate-rising cycles. For decades, the Fed didn’t even announce policy changes, and it could take some time to discern that one had occurred by watching open market operations and determining behavior that couldn’t be explained by seasonal and other special factors. Policymakers have come to believe […] More

Iceland’s Central Bank Tightens and Suggest More Restraint May Follow

November 7, 2018

A 25 basis point increase of the Bank of Iceland’s 7-day term rate to 4.50% was the first tightening since November 2015. In between, the benchmark had been reduced by 50 basis points in August 2016 and 25 basis point each in May 2017, June 2017, and October 2017. Today’s rate reversal comes in response […] More

Another Tightening of Czech Monetary Policy

November 1, 2018

By a vote of 5-1 with one dissent in favor of unchanged policy, the Czech National Bank Board authorized a further 25-basis point increase in the benchmark two-week repo rate to 1.75% and in the Lombard and discount rates that flank it. This was the sixth hike of the repo rate since rate normalization began […] More

Bank of Japan

October 31, 2018

A statement released by the Bank of Japan Board after this week’s four hour 11 minute monetary policy review left all settings of the policy known as Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control unchanged. Similar to other recent meetings, the decision was taken by a 7-2 vote, with dissents from Yutaka […] More

European Central Bank Accentuates the Cup Being Half Full

October 25, 2018

Today’s ECB Governing Council meeting was not one associated with updated macroeconomic forecasts, but the President Draghi’s introductory statement and press conference expressed confidence in a coming convergence of currently muted inflation on the target of less than but close to 2%. The Council expects continuing positive broadly based economic growth despite some recent weakening […] More

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