Central Bank Watch

Another Indonesian Interest Rate Cut

March 19, 2020

Officials at Bank Indonesia reduced the 7-day reverse repo rate by 25 basis points to 4.5%. There was also a 25-basis point cut in February and a full percentage point of reduction in four moves during the second half of last year. Taken together all but 25 basis points of the 175-bp of tightening in […] More

Taiwanese Interest Rate Cut Exceed Expectations

March 19, 2020

The Central Bank of the Republic of China (Taiwan) reduced its discount rate by a greater-than-anticipated 25 basis points to 1.125%. This was the rates first change since a cut of 12.5% in June 2016. Officials also established a special loan facility for small and medium-sized enterprises. The coronavirus will be a big growth depressant […] More

Swiss National Bank to Be Vigilant with Intervention to Contain Franc Strength

March 19, 2020

The Swiss National Bank‘s sight deposit rate of negative 0.75% since January 2015 was retained at that central bank’s quarterly policy review, and officials characterized the franc as even more overvalued than before, which will necessitate more intense intervention in the FX market. Extra steps are being taken to ensure ample liquidity. Officials do not […] More

Australian Interest Rate Cut

March 19, 2020

The Reserve Bank of Australia, which at a scheduled meeting on March 3 had cut its official cash rate by 25 basis points, cut the OCR by an additional 25 bps today to a record low of 0.25%. This move was only part of a multi-pronged package spelled out in a statement. A significant loss […] More

A Greater-than-Expected 50-Basis Point Selic Rate Cut in Brazil

March 18, 2020

Copom, the interest rate policy-making committee at the Central Bank of Brazil had previously cut its Selic rate five times since last July. While the first four reductions were by 50 basis points each, the increment was halved to 25 basis points at last month’s review, and this had analysts anticipating another 25-basis point cut […] More

Second Icelandic Interest Rate Cut in A Week

March 18, 2020

The Central Bank of Iceland (Sedlabanki) at an unscheduled meeting lowered its 7-day term rate by another 50 basis points to a record low of 1.75%. The rate was cut by 50 basis points and reserve requirements were reduced to zero percent at the Bank’s Monetary Policy Committee’s March 11 meeting. The spreading covid-19 pandemic […] More

Turkey’s One-Week Repo Rate Cut to 9.75% from 10.75%

March 17, 2020

The Central Bank of Turkey‘s board, which was to have reviewed policy later this week, announced a larger-than-anticipated 100-basis point reduction of its one-week repo rate. Reductions in January and February had been by 75 and 50 basis points, respectively, and at 9.75%, the benchmark has fallen 14.25 percentage points from the high of 24.0% […] More

Bank of Japan Addresses Liquidity Squeeze With Several Policy Changes but Stops Short of Cutting Interest Rates Further

March 16, 2020

The Bank of Japan held an emergency Board meeting that lasted roughly two hours and then announced a number of actions clearly motivated by the approaching corporate fiscal yearend on March 31st.  Unlike central banks in the U.S., South Korea, New Zealand, Hong Kong and Macau, Japanese officials did not cut their targeted interest rates […] More

Bank of Korea’s Base Rate Reduced 50 Basis points to 0.75%

March 16, 2020

The Bank of Korea’s base rate was reduced to new record low of 0.75%. Like the Fed, Reserve Bank of New Zealand, and Monetary Authorities of Hong Kong and Macau, the BOK acted between scheduled policy meetings. Korea’s rate benchmark had been 1.25% since a pair of 25-basis point cuts in July and October of […] More

Discount Window Base Rates cut by 64 Basis Points in Hong Kong and Macau

March 16, 2020

The interest rate policy of the Hong Kong Monetary Authority is subordinated to maintaining the Hong Kong Dollar parity against the U.S. dollar. The former British colony’s currency has been pegged at 7.8 per USD since October 1983, and this necessitates changes in the HKMA’s key interest rate whenever the FOMC’s federal funds target is […] More