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May 2011

Chile Central Bank Increases Rate 50bps to 5.00%

May 13, 2011 by CentralBankNews   Comments (0)

The Banco Central de Chile increased its monetary policy interest rate by 50 basis points to 5.00% from 4.50% previously.  The Bank said: "The Board estimates that additional increases in the monetary policy rate will be necessary, the timing and the magnitude depending on the unfolding of domestic and external macroeconomic conditions. Accordingly, it will continue to use its policies with flexibility so that projected inflation stands at 3% over the policy horizon."  The Bank said core inflation is holding around 3%, which is in the middle of the Bank's 2-4% inflation target.

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Central Reserve Bank of Peru Lifts Rate 25bps to 4.25%

May 13, 2011 by CentralBankNews   Comments (0)

The Central Reserve Bank of Peru raised its monetary policy reference rate 25 basis points to 4.25% from 4.00% previously.  The Bank said: "This measure is aimed at offsetting the impact of the rise in the international prices of food and fuels on inflation expectations, in a context of high growth of domestic demand. Future adjustments in the reference rate will depend on new information on the evolution of inflation and its determinants."  Peru reported annual inflation of 3.34% in April, above the Bank's 1-3% inflation target.

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Bank of Ghana Cuts Rate 50bps to 13.00%

May 13, 2011 by CentralBankNews   Comments (0)

The Bank of Ghana reduced its key lending rate by 50 basis points to 13.00% from 13.50% previously.  The Bank said: "Price developments over the past four months suggest diminishing inflation expectations following the rise in inflation in January after increases in the domestic price of petrol. The threats to inflation have diminished due to better domestic production of food and weak second round effects of the petroleum price adjustment."  Ghana reported inflation of 9.0% in April, compared to 9.1% in the previous month, while food price inflation eased to 4.2% from 4.7% in the same period.

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South African Central Bank Holds Rate at 5.50%

May 13, 2011 by CentralBankNews   Comments (0)

The South African Reserve Bank maintained the repo rate unchanged at 5.50% despite a rise in "cost-push" inflation.  The Bank said: "...the inflation outlook has deteriorated further, mainly as a result of external cost-push factors.  Underlying demand conditions remain relatively restrained, and are not seen to pose a significant risk to the inflation outlook at this stage. However there are elevated risks that these external price shocks could ultimately feed through to more generalised inflation."  South Africa reported inflation of 4.1% in March, up from 3.7% in February this year, with core inflation at 3.4%.

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Bank of Korea Maintains 7-day Repo Rate at 3.00%

May 13, 2011 by CentralBankNews   Comments (0)

The Bank of Korea maintained the 7-day repurchase rate unchanged at 3.00%.  South Korea reported consumer price inflation of 4.2% in April, above the Bank's inflation target of 2%-4% through 2012.  The Bank forecasts inflation of 3.9% and GDP growth of 4.5% during 2011.  The Bank said: "Looking ahead, the Committee, while taking overall account of financial and economic conditions both at home and abroad, will conduct monetary policy with a greater emphasis on ensuring that the basis for price stability is firmly anchored while the economy continues its sound growth."

www.CentralBankNews.info

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Latvian Central Bank Holds Rate at 3.50%

May 13, 2011 by CentralBankNews   Comments (0)

Latvijas Banka maintained the refinancing rate unchanged at 3.50%.  Latvia reported inflation of 4.5% in April, with the Bank noting: "The rise in inflation at the beginning of the year is determined by supply side factors and administrative decisions, such as the raising of taxes,".  The Bank also said: "Taking into account the gradual recovery of the economy and the fact that the current inflation risk factors are not related to a rise in demand and risks to price stability in the medium term are limited, the Bank of Latvia Council today resolved to leave unchanged the interest rates and the mandatory reserve requirement,"

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Norwegian Central Bank Hikes Rate 25bps to 2.25%

May 13, 2011 by CentralBankNews   Comments (0)

The Norges Bank increased its key policy rate by 25 basis points to 2.25% from 2.00% previously.  The Bank said: "The upturn in the Norwegian economy has gained a firm footing. Several other central banks have raised their key rates. The consideration of stabilising activity and inflation somewhat further ahead suggests that the key policy rate should be raised".  The Bank noted that the oil rich Norwegian economy saw underlying inflation of "1¼ – 1½ per cent".

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People's Bank of China Raises Reserve Requirements 50bps to 21%

May 12, 2011 by CentralBankNews   Comments (0)

The People's Bank of China raised the required reserve ratio by 50 basis points, bringing the average rate to 21% for large banks (and 19% for smaller banks), effective 18 May 2011.  Earlier in the week Chinese Vice Premier Wang Qishan said "The most pressing problem we are facing right now is the problem of inflation,".  China reported inflation of 5.3% in April, compared to 5.4% in March this year, and above the government's target of 4%.  The move is expected to drain around 370 billion Yuan from the banking system.  The People's Bank of China last raised the required reserve ratio 50bps on the 17th of April, and raised the benchmark interest rate 25bps on the 5th of April this year.

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Bank Indonesia Holds Benchmark Interest Rate at 6.75%

May 12, 2011 by CentralBankNews   Comments (0)

Bank Indonesia maintained its benchmark interest rate unchanged at 6.75% but noted inflation risks.  Indonesia reported headline consumer price inflation of 6.16% in April, down slightly from 6.65% in March, and just outside the inflation target of 5% +/-1% in 2011 (which changes to 4.5% +/-1% in 2012).  The Indonesian economy expanded 6.5% on an annual basis in Q1 this year, slightly slower than 6.9% in Q4 2010.

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Uruguay Raises Reserve Requirements 300bps

May 12, 2011 by CentralBankNews   Comments (0)

The Banco Central del Uruguay raised reserve requirements for banks on peso deposits by 300 basis points to 15% from 12% and 300 basis points on foreign currency deposits to 18% from 15%.  The Bank said "In light of internal price increases and the international context, we understand that we must take additional measures beyond the benchmark rate,".  Uruguay reported inflation of 8.34% in April, above the government's 3%-7% inflation target range.

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