Central Bank Watch
Central Bank of Sri Lanka
November 18, 2014
The central bank lending rate (reverse repo) and borrowing rate (repo) have been at 8.0% and 6.5% since the former was cut from 8.5% last January. Between December 2012 and October 2013, each of those rates also were lowered in three steps by a cumulative 125 basis points. Falling inflation justified these reductions. On-year CPI […] More
New Overnight Developments Abroad - Daily Update
More Good News Than Bad News
November 18, 2014
Japanese Prime Minister Abe has delayed imposition of the planned consumption tax by 18 months to April 2018 and dissolved parliament effective this Friday in preparation for a snap lower house election presumably on December 21. Abe’s LDP/Komeito coalition was elected in December 2012 to a four-year term. An election far ahead of schedule invites […] More
Deeper Analysis
Some of the Global Slowdown’s Footprints
November 17, 2014
The euro area and Japanese economies together comprise about a fifth of global GDP. In Japan, real GDP fell 1.2% between 3Q13 and 3Q14, and Euroland GDP in that span fell by 0.3%. The annualized pace of growth during the past 36 months has been zero in the euro area and just 0.4% in Euroland. […] More
New Overnight Developments Abroad - Daily Update
Japanese GDP Shocker
November 17, 2014
Japanese real gross domestic product, which had been projected to rebound 0.5% or somewhat more, instead fell another 0.4% last quarter after an upwardly revised 1.9% plunge in 2Q immediately following the economy’s April consumption tax hike. In annualized terms, GDP fell 7.3% in 2Q and 1.6% in 3Q, revealing an unexpected recession and reviving […] More
Foreign Exchange Insights and Next Week
Next Week
November 14, 2014
Monetary policy meetings are planned next week in Japan, South Africa and Turkey. The Bank of England, Reserve Bank of Australia and Federal Reserve will be releasing minutes of their last policy meetings, and the Bank of Japan publishes its monthly economic assessment. Some of the Fed officials speaking publicly next week are Kocherlakota, Evans, […] More
Central Bank Watch
Central Reserve Bank of Peru: A Continuing Bias Toward Accommodation
November 14, 2014
After having left Peru’s policy interest rate unchanged for a second straight meeting at 3.5% but cutting reserve requirements by another 0.5 percentage points to 10.0%, officials released a statement that emphasized the weakness of Peru’s economic cycle, the well-anchoring of expected inflation around the 2% target midpoint, mixed global economic signals and “increased volatility […] More
New Overnight Developments Abroad - Daily Update
Weaker Yen and Gold, Firmer Dollar, and Soft Data
November 14, 2014
The yen dropped 0.6% against the dollar to a new multi-year low of 116.51 and fell also to a 10-month low of 145.09 per euro. The U.S. currency otherwise advanced 0.3% against the euro, Australian dollar and sterling, 0.2% versus the Swiss franc and kiwi and 0.1% relative to the yuan. The Swiss currency continues […] More
Central Bank Watch
Rate Cut by National Bank of Serbia
November 13, 2014
After cutting their policy interest rate by 50 basis points for a third time in the half year since May, Serbian monetary officials released a statement that essentially made two points. First, inflation has been below target for the past eight months and is likely to remain subdued amid persistent disinflationary forces. Secondly, the risk […] More
Central Bank Watch
Bank Indonesia Makes No Change in BI Interest Rate
November 13, 2014
Between June and October of 2013, the BI reference interest rate was lifted twice by 50 basis points and three other times by 25 basis points, reaching 7.5% at the end of the period versus 5.75% at the start. Since that tightening, there have been no further rate modifications, and the rate will remain at […] More
Central Bank Watch
Bank of Korea: No Change
November 13, 2014
South Korea’s seven-day repo rate had been cut by 25 basis points in October, the fourth such reduction since November 2012 and the second of 2014. October’s vote had included one dissent, objecting to any policy change, but this month’s decision to leave the policy interest rate at 2.0% was made unanimously. A statement released […] More
