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Central Bank News Link List - Oct 24, 2014 - ECB set to fail 25 banks in review, draft document shows

October 24, 2014 by CentralBankNews   Comments (0)

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

          www.CentralBankNews.info

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Central Bank News Link List - Oct 23, 2014 - ECB bond purchases seen by traders exceeding $1 billion

October 23, 2014 by CentralBankNews   Comments (0)

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

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Turkey holds rates, tight stance until inflation improves

October 23, 2014 by CentralBankNews   Comments (0)

    Turkey's central bank maintained its short term interests rates, including the benchmark one-week repo rate at 8.25 percent, repeating its recent guidance that a "tight monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook."
    The Central Bank of the Republic of Turkey (CBRT)which raised its repo rate by 550 basis points  to 10.0 percent in January and then began cutting it from May through July, said its macro prudential measures and its tight policy stance had a favorable impact on core inflation but elevated food prices were delaying an improvement in the outlook for inflation.
    However, declining oil prices are expected to contribute to lower inflation in 2015, the bank added.
    Turkey's headline inflation rate eased to 8.86 percent in September from 9.54 percent in August and the CBRT has a year-end inflation goal of 7.6 percent.
     Turkey's Gross Domestic Product contracted by 0.5 percent in the second quarter from the first quarter for annual growth of 2.1 percent, down from 4.7 percent in the first quarter.

      The CBRT issued the following statement:


"Participating Committee Members
Erdem Başçı (Governor), Ahmet Faruk Aysan, Murat Çetinkaya, Turalay Kenç, Necati Şahin, Abdullah Yavaş, Mehmet Yörükoğlu. 
The Monetary Policy Committee (the Committee) has decided to keep the short term interest rates constant at the following levels:
a)    Overnight Interest Rates: Marginal Funding Rate at 11.25 percent, the interest rate on borrowing facilities provided for primary dealers via repo transactions at 10.75 percent, and borrowing rate at 7.5 percent,
b)    One-week repo rate at 8.25 percent,
c)    Late Liquidity Window Interest Rates (between 4:00 p.m. – 5:00 p.m.): Borrowing rate at 0 percent, and lending rate at 12.75 percent.
Loan growth continues at reasonable levels in response to the tight monetary policy stance and macroprudential measures. Exports remain supportive of balanced growth in spite of weakening global demand. 
Macroprudential measures taken at the beginning of the year and the tight monetary policy stance continue to have a favorable impact on the core inflation trend. However, elevated food prices delay the improvement in the inflation outlook. Meanwhile, current levels of commodity prices, in particular declining oil prices, are expected to contribute to disinflation foreseen for the next year.       
Inflation expectations, pricing behavior and other factors that affect inflation will be closely monitored and the tight monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook.
It should be emphasized that any new data or information may lead the Committee to revise its stance.
The summary of the Monetary Policy Committee Meeting will be released within five working days."

  www.CentralBankNews.info

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Philippines holds rate, sees lower inflation 2014-2016

October 23, 2014 by CentralBankNews   Comments (0)

    The central bank of the Philippines maintained its key policy rates at 4.0 percent and said inflation is expected to be lower than expected in the 2014-2016 period due to easing pressures on commodity prices while domestic demand remains resilient.
    Bangko Sentral ng Pilipinas (BSP), which raised its rate last month to rein in inflationary expectations, also said the risks to inflation were broadly balanced and it was maintaining its policy stance to allow the tighter policy since March to work its way through the economy.
    Last month BSP also said the favorable prospects for domestic demand allowed its scope for a further adjustment in rates but it dropped this guidance today.
    Instead the central bank said it would remain vigilant against any developments that could affect the outlook for inflation and financial stability and was ready to take appropriate action to safeguard its objectives for price and financial stability.
    The headline inflation rate in the Philippines eased to 4.4 percent in September from 4.9 percent in August and its Gross Domestic Product in the second quarter expanded by 1.9 percent from the first quarter for annual growth of 6.4 percent, up from 5.6 percent in the previous quarter.
      
    BSP issued the following statement:

"At its meeting today, the Monetary Board decided to maintain the BSP's key policy rates at 4.00 percent for the overnight borrowing or reverse repurchase (RRP) facility and 6.00 percent for the overnight lending or repurchase (RP) facility.  The interest rates on term RRPs, RPs and special deposit accounts (SDA) were also kept steady. The reserve requirement ratios were left unchanged as well.
The Monetary Board’s decision is based on its assessment of a more manageable inflation environment, based on latest baseline projections indicating within-target inflation for the policy horizon. Latest forecasts show a lower inflation path for 2014-2016, reflecting easing pressures on commodity prices. Inflation expectations have also remained broadly stable and aligned to the inflation target. At the same time, domestic demand conditions continue to be resilient, supported by  adequate domestic liquidity and robust bank lending growth.
The Monetary Board noted that the risks to the inflation outlook are broadly balanced, with potential price pressures emanating from pending petitions for adjustments in utility rates and possible power shortages. Meanwhile, global economic prospects are likely to stay uneven, thus mitigating upward pressures from commodity prices going forward.
Given these considerations, the Monetary Board deemed it prudent for the time being to allow previous monetary responses to continue to work their way through the economy. The Monetary Board emphasized that the BSP will remain vigilant against developments that could affect the outlook for inflation and financial stability and is prepared to take appropriate policy action as necessary to safeguard its price and financial stability objectives."





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Norway holds rate, no guidance for same rate by end-'15

October 23, 2014 by CentralBankNews   Comments (0)

    Norway's central bank retained its policy rate at 1.5 percent, as expected, saying inflation and economic growth are largely as expected but the decline in oil prices and uncertainty surrounding the euro area had increased the uncertainty surrounding the outlook.
    Norges Bank, which last cut its rate in March 2012, added that the Norwegian krone currency had also depreciated since its last meeting in September, reflecting the drop in oil prices.
    In September the central bank said it expected the policy rate to remain at the current level until the end of 2015 before it starts to gradually increase. Today it omitted that guidance.
      Norway's headline inflation rate was unchanged in September at 2.1 percent while its Gross Domestic Product rose by 0.9 percent in the second quarter from the first for a contraction of 0.3 percent in comparison with the second quarter of 2013.
    Norges Bank issued the following statement:
   

“New information suggests that inflation and growth in the Norwegian economy are broadly in line with the September projections. Against this background, the key policy rate remains unchanged. At the same time, developments abroad and the fall in oil prices has increased the uncertainty regarding the outlook for the Norwegian economy”, says Governor Øystein Olsen.

Economic growth among Norway’s trading partners is still moderate, but the outlook has deteriorated somewhat since the September 2014 Monetary Policy Report. Uncertainty regarding developments ahead has increased, particularly in the euro area. The expected rise in key rates abroad has again been deferred. Equity prices and oil prices have fallen.
In Norway, unemployment is still stable. Consumer price inflation remains close to 2.5 percent. The krone has depreciated since September, reflecting the fall in oil prices. At the same time, banks have lowered residential mortgage lending rates."

    www.CentralBankNews.info

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Canada maintains rate on balanced risks to inflation

October 22, 2014 by CentralBankNews   Comments (0)

    Canada's central bank maintained its benchmark target for the overnight rate at 1.0 percent, as widely expected, saying the "risks to its inflation projection are roughly balanced" while the risks to financial stability associated with household debt were edging higher.
    The Bank of Canada (BOC), which has maintained its policy rate since September 2010, omitted giving financial markets and investors specific guidance about its expected future policy, a move that was expected following a speech earlier this month in which Governor Stephen Poloz said forward guidance was best reserved for times of crises.
    At its last policy meeting in September, the BOC said it was neutral with respect to the next change in its policy rate, with the timing and direction depending on how new information influences its outlook. Economists expect the BOC to start raising its rates around the middle of next year.
    In today's statement, the BOC said total consumer price inflation was evolving broadly as expected, with underlying inflationary pressures muted but as the economy reaches full capacity in the second half of 2016, both core and total consumer price inflation are projected to be about 2 percent on a sustained basis.
    In its latest monetary policy report, the BOC raised its forecast for inflation marginally from July. Core inflation is forecast to average 2.1 percent in the fourth quarter of this year, up from July's projection of 1.8 percent while total CPI inflation rises to 2.2 percent, the same as forecast in July.

    In the fourth quarter of 2015, core inflation is seen averaging 1.8 percent, the same as in July, rising to 2.0 percent in the fourth quarter of 2016, unchanged from July. Total CPI inflation is forecast at 1.8 percent in the fourth quarter of 2015, down from July's 1.9 percent forecast, rising to 2.0 percent in the fourth quarter of 2016, the same as seen in July.
    In September Canada's core inflation rate was steady at 2.1 percent while headline inflation eased to 2.0 percent from 2.1 percent in August.
    Although the BOC said the outlook remains for stronger momentum in the global economy in 2015 and 2016,  it noted weakness since July and "persistent headwinds continue to buffet most economies and growth remains reliance on exceptional policy stimulus."
    But the BOC was relatively optimistic about the economic outlook, saying "confidence in the sustainability of domestic and global demand should improve and business investment should pick up. Together with a moderation in the growth of household spending, this is expected to gradually return Canada’s economy to a more balanced growth path."
    It also noted that the U.S. economy is gaining traction, particularly in sectors that are beneficial to Canada and the country's exports have begun to respond.
    Canada's economy is forecast to average close to 2.5 percent over the next year before slowing gradually to 2 percent by the end of 2016, roughly what the BOC considers to be the growth rate of potential output.
    In its latest forecast, annual growth is forecast at 2.2 percent in the fourth quarter of this year, up from July's forecast of 2.1 percent, and then pick up speed to 2.4 percent in the final quarter of 2015, the same as seen in July. In the fourth quarter of 2016 Gross Domestic Product growth is forecast at 2.2 percent, the same as forecast in July.
    In the second quarter of this year, Canada's GDP expanded by 0.8 percent from the first quarter for annual growth of 2.45 percent, up from 2.14 percent in the first quarter.

    The BOC issued the following statement:

"The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
Inflation in Canada is close to the 2 per cent target. Core inflation rose more rapidly than was expected in the Bank’s July Monetary Policy Report (MPR), mainly reflecting unexpected sector- specific factors. Total CPI inflation is evolving broadly as expected, as the pickup in core inflation was largely offset by lower energy prices. Underlying inflationary pressures are muted, given the persistent slack in the economy and the continued effects of competition in the retail sector.
Although the outlook remains for stronger momentum in the global economy in 2015 and 2016, the profile is weaker than in July and growth prospects are diverging across regions. Persistent headwinds continue to buffet most economies and growth remains reliant on exceptional policy stimulus. Against a background of ongoing geopolitical uncertainties and lower confidence, energy prices have declined and there has been a significant correction in global financial markets, resulting in lower government bond yields. Despite weakness elsewhere, the U.S. economy is gaining traction, particularly in sectors that are beneficial to Canada’s export prospects. The U.S. dollar has strengthened against other major currencies, including the Canadian dollar.
In this context, Canada’s exports have begun to respond. However, business investment remains weak. Meanwhile, the housing market and consumer spending are showing renewed vigour and auto sales have reached record highs, all fuelled by very low borrowing rates. The lower terms of trade will have a tempering effect on income.
Canada’s real GDP growth is projected to average close to 2 1/2 per cent over the next year before slowing gradually to 2 per cent by the end of 2016, roughly the estimated growth rate of potential output. As global headwinds recede, confidence in the sustainability of domestic and global demand should improve and business investment should pick up. Together with a moderation in the growth of household spending, this is expected to gradually return Canada’s economy to a more balanced growth path. As the economy reaches its full capacity in the second half of 2016, both core and total CPI inflation are projected to be about 2 per cent on a sustained basis.

Weighing all of these factors, the Bank judges that the risks to its inflation projection are roughly balanced. Meanwhile, the financial stability risks associated with household imbalances are edging higher. Overall, the balance of risks falls within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at 1 per cent."

    www.CentralBankNews.info

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Central Bank News Link List - Oct 22, 2014 - Carney’s BOE majority holds firm on heightened euro-area risks

October 22, 2014 by CentralBankNews   Comments (0)

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

          www.CentralBankNews.info

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Namibia holds rate but still concerned over credit growth

October 22, 2014 by CentralBankNews   Comments (0)

    Namibia's central bank maintained its repo rate at 6.0 percent to "support domestic economic activities" while it monitors the impact of the two interest rate increases in June and August.
    But the Bank of Namibia, which has raised its rate by a total of 50 basis points this year, said it was still concerned over the strong growth in household credit that is largely financing the import of unproductive luxury goods, such as cars, and putting pressure on international reserves.
    The central bank said credit to the private sector increased to an average rate of 15.5 percent in the first eight months of the year from 14.2 percent in the previous eight month period, with strong growth in credit to individuals in overdrafts, loans, advances and installment credit.
    This resulted in a further widening of the trade deficit in January-August period, the bank said, adding that its international reserves remain sufficient to meet its foreign obligations.
    While the central bank did not provide any data for international reserves, it said in August that foreign exchange reserves had declined 15 percent since the start of the year to 15.9 billion Namibian dollars (NAD) in June.
    Data showed that foreign exchange had risen in April to 17.482 billion NAD from 14.595 billion in March.
    In the second quarter of this year, Namibia's trade deficit amounted to 5.649 billion NAD, down from 6.785 billion in the first quarter while the current account deficit in the same period fell to 1.685 billion NAD from 3.216 billion.

    Namibia's inflation rate eased to 5.3 percent in September from 5.4 percent in August, continuing the decline since hitting a 2014-high of 6.1 percent in June, with the decline mainly reflected in the cost of food, transport and housing, the bank said.
    Inflation is expected to average around 5.5 percent for 2014, the bank said, down from its August estimate of 6.0 percent.
     Namibia's economy has benefited from exports of diamonds, beef and fish and the bank said it is expected to improve this year compared with last year, supported by construction, strong domestic demand, diamond mining and manufacturing.
    But activity in agriculture, uranium and zinc production have performed poorly in the first eight months of the year, the bank added.
     The risk to growth remains low commodity prices due to depressed demand which could negatively affect export earnings, mining profits and employment.
   On Sept. 30, the central bank forecast in its quarterly report that the economy would expand 5.4 percent this year, up from an estimated 5.1 percent growth in 2013.
   

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Central Bank News Link List - Oct 21, 2014 - Euro drops on speculation ECB may expand stimulus

October 21, 2014 by CentralBankNews   Comments (0)

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

          www.CentralBankNews.info

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Central Bank News Link List - Oct 20, 2014 - Market action reinforces need for policy patience: Fed’s Rosengren

October 20, 2014 by CentralBankNews   Comments (0)

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

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