Central Bank Watch

Another Indonesian Central Bank Rate Cut

February 18, 2021

The Board of Governors of Bank Indonesia as expected authorized a 25-basis point cut of its seven-day reverse repo rate to 3.5%, which brings the cumulative reduction since the start of last year to 150 basis points. The previous easing was done just 3 months ago. A released statement observes low inflation, which at 1.55% […] More

Turkish Tight Monetary Policy Maintained

February 18, 2021

Priorities are different at the Central Bank of Turkey, whose economy is again experiencing a vicious cycle of accelerating inflation and lira depreciation. Inflation expectations are higher, fed additionally by elevated food prices. From January to May of 2020, officials cut their one-week repo rate five times by a total of 375 basis points, only […] More

January 26-27th FOMC Minutes

February 17, 2021

At the U.S. Federal Open Market Committee’s first monetary policy review of 2021, officials voted unanimously to continue to target the federal funds rate at 0-0.25% and to purchase a total of $120 billion of bonds per month ($80 billion of Treasuries and $40 billion of agency MBS). Minutes from that meeting released today found […] More

Zambian Central Bank Rate Hike Amid Rising Inflation

February 17, 2021

The Bank of Zambia raised its reference interest rate by 50 basis points to 8.5%, marking the first increase since November 2019. The rate during 2020 had be cut 225 basis points in May and another 125 bps in August, but Zambian inflation has been above the 6-8% target and increasingly so of late. A […] More

Bank of Mexico Rate Cut

February 12, 2021

Following two monetary policy reviews in which the Bank of Mexico’s easing trend was put on hold, officials there cut their overnight interbank lending rate by 25 basis points to 4.0%. This move had been expected. A released statement notes that Mexican real GDP plunged 8.5% in 2020, which for now is considered a greater […] More

Reserve Bank of India’s Cash Reserve Ratio Raised

February 5, 2021

The Reserve Bank of India as expected left its repo rate and reverse repo rate unchanged at 4.0% and 3.35%, respectively (there had been rate cuts of 115 basis points during 2020.) at the same time an initial move away from the ultra-expansionary stance commenced with today’s other decision to raise the bank’s cash reserve […] More

Bank of England Keeps Policy as Is in Unanimous Vote

February 4, 2021

The Bank of England‘s Monetary Policy Committee had reduced the base rate twice in March 2020, first by 50 basis points and a week later by 15 bps to 0.10%. Today’s statement¬†after maintaining 0.10% and bond-purchase ceilings of GBP 875 billion for gilts and GBP 20 billion of corporate bonds provides the following guidance to […] More

Reserve Bank of Australia Lays Out a Long Path Before a First Interest Rate Hike

February 2, 2021

After customarily skipping of a January Board meeting, monthly policy reviews resumed in Australia where officials agreed to leave their Official Cash Rate unchanged at a record low of 0.1% where such has been since a 15-basis point in November. The OCR previously in 2020 had been cut twice in March by 25 basis points […] More

FOMC Statement and Press Conference

January 27, 2021

Today’s FOMC statement makes some modifications in the second and third paragraphs that deal with current U.S. economic conditions and their outlook.¬† December’s press release had talked about a continuing recovery of activity and employment, while today’s assessment speaks of a “moderating” recovery recently concentrated in sectors affected by Covid. A phrase “progress on vaccinations” […] More

FOMC Preview

January 27, 2021

The Federal Open Market Committee holds eight scheduled meetings per year and consists of the seven members of the Board of Governors (appointed by the president and confirmed by the senate), the New York Fed president, who serves as Vice Chairman of the FOMC, and four of the other eleven district presidents, who rotate onto […] More