Central Bank Watch

Monetary Authority of Singapore Tightens Stance

October 14, 2021

Today, the Monetary Authority of Singapore, which targets the exchange rate rather than an interest rate and which reviews its stance only semi-annually, surprised analysts by raising the slope of the S-dollar’s allowed trading band. The band had been lowered in April 2020 as Covid hit to a slope of zero percent. Officials did not […] More

National Bank of Serbia

October 7, 2021

Policymakers at the National Bank of Serbia, unlike several other central banks earlier this month, did not raise their key interest rate at the latest review. Following four reductions totaling 125 basis points between March and December last year, such will remain at a record low of 1.0%. However, an initial snugging of monetary policy […] More

National Bank of Poland Tightens

October 6, 2021

Poland’s is the latest central bank to hike interest rates in the face of above-target inflation. Whereas earlier rate increases announced in New Zealand and Iceland were not unexpected, a 40-basis point policy rate hike to 0.5%, which reverses the last of three cuts in the first half of 2020, had not been forecast. In […] More

Central Bank of Iceland Implements Third Rate Hike of 2021

October 6, 2021

At the Central Bank of Iceland, the seven-day term deposit rate was increased by 25 basis points to 1.5%. This is the third quarter percentage point tightening since May. Inflation topped 4% at 4.4% last month, and supply chain shortages continue, further risking an upward drift in inflation expectations. While first-half growth underperformed the expectations […] More

Reserve Bank of New Zealand Raises OCR

October 6, 2021

The Reserve Bank of New Zealand’s Official Cash Rate was doubled to 0.50% in the first increase since June 2014. A statement released by the Monetary Policy Committee there warns that “the economy contracted sharply during the recent nationwide health-related lockdown” but identifies “cause for concern in that inflation expectations appear to have begun rising […] More

January’s Romanian Central Bank Rate Cut Reversed at this Month’s Review

October 5, 2021

The National Bank of Romania‘s has raised its monetary policy rate by 25 basis points to 1.5%. At the onset of the pandemic, the rate had been slashed during 2020 by 50 basis points in March, 25 bps in May and 25 bps in August. The easing culminated with a fourth cut in January to […] More

Central Banks in Mexico and Colombia Lift Interest Rates by 25 Basis points

September 30, 2021

The Bank of Mexico’s overnight interest rate, which had been cut by 25 basis points in February to culminate a cumulative reduction of 325 basis points over a one-year period, has been subsequently raised by 25 basis points three subsequent times to 4.75% to counter rising inflation and ensure that inflation will settle back to […] More

Big Rate Hike by the Czech National Bank

September 30, 2021

The Czech National Bank two-week repo rate was hiked by 75 basis points to 1.50%. Instead of implementing a third 25-bp increase since June, this surprisingly large tightening reverses all but 50 basis points of last year’s net reduction of the policy interest rate. In early February of 2020, the rate had been raised from […] More

Bank of England

September 23, 2021

The Bank of England’s message was much like the Fed’s. While keeping the base rate pinned at 0.10% and maintaining quantitative stimulus at the recent pace, there were two, up from one, dissenters who favored cutting back the central bank’s pace of government bond purchases. A released statement revised down projected third-quarter British GDP growth […] More

Norges Bank

September 23, 2021

Central bank rate normalization has begun in Norway. Officials of the Bank of Norway at today’s scheduled policy review decided to increase their policy rate by 25 basis points to 0.25% from a record low of zero percent. This action reverses a 25-bp cut in May 2020 that followed two reductions in March totaling 75 […] More