Central Bank Watch
Bank of Japan Leaves Policy Unchanged
The Policy Board as expected announced no further policy changes after this month’s meeting. The vote was unanimous. A statement released on the central bank web site projects a moderate recovery in October-March, powered by exports and restoration of capital stock damaged in the earthquake. Core CPI inflation is now running at around zero, a [...]
No Change Made This Month in Australian Official Cash Rate
Australian monetary policy was left unchanged as expected, and a more dovish statement was released than after the August Policy Board meeting. The statement leads off with a discussion of “very unsettled” global financial conditions and reduced growth expectations in the advanced economies. For Australia, too, “the near-term growth outlook continues to look somewhat weaker [...]
Dramatic Reversal of Brazilian Monetary Policy
Brazilian monetary authorities unexpectedly cut the key Selic interest rate by 50 basis points to 12.0% on August 31. A statement released by COPOM, the policy committee, justified the action because of the sudden emergence of a “deflationary bias” in the international environment due to worsening growth estimates, limited scope for more monetary stimulus among [...]
Bank of Israel in Pause Mode with Lessening Urgency to Tighten
From a low of 0.5% prior to August 2009 when the Bank of Israel became the first central bank anywhere to tighten after the Great Recession, ten rate hikes had been implemented by May of this year. Today, the Bank of Israel decided to extend its three-month policy pause at least for another month and [...]
No Change in Mexican Central Bank Rate
As expected, policymakers at the Bank of Mexico kept their benchmark interest rate at 4.5%. A released statement noted that The external environment deteriorated significantly in recent weeks; Productive activity in Mexico continues to trend positively, but its growth rate has lost some dynamism. Some components of domestic expenditure have slowed moderately, while exports remain [...]
No Surprises in Bernanke’s Jackson Hole Speech
In predictable and balanced remarks, the Fed Chairman generally avoided tipping his hand regarding what the FOMC might do in the near term. As expected by yesterday, he did not announce any new measure, nor did he go into detail about specific other steps that could be taken. He’s done that on earlier occasions including [...]
Return of the Chairman
Hope has ebbed progressively all week that Federal Chairman will pre-announce a new monetary stimulus in his Jackson Hole speech Friday, just as he did exactly a year ago. Not only did central bank spokesmen say nothing during the week to encourage the high hopes of last Monday, but the press and business talk shows [...]
Thailand Gets Ninth Central Bank Rate Hike
The Bank of Thailand raised the one-day bond repurchase rate to 3.5% from 3.25% as most analysts had predicted. From a cyclical low of 1.2% prior to mid-2010, rate increases of the same magnitude were implemented in July, August, and December of 2010 and January, March, April, June, and July of this year. The written [...]
No Further Turkish Monetary Policy Changes for Now
At an interim unscheduled meeting on August 4, policy makers at the Central Bank of the Republic of Turkey sliced their benchmark one-week repo rate by 50 basis points to 5.75% and narrowed the corridor between their overnight lending and borrowing rates by raising the latter 350 bps to 5.0% but not changing the former’s [...]
Pause Continued in Hungarian Monetary Policy
Officials at the Magyar Nemzeti Bank left the two-week deposit rate at 6.0% for another month. This decision was widely expected. The interest rate benchmark has been held at that level for the past seven months after three consecutive tightenings of 25 basis points each administered in the final two months of 2010 and January [...]
