<![CDATA[Hedgehogs.net: Ken Yeadon's connections' blogs]]> http://www.hedgehogs.net/pg/blog/keny/friends/?view=rss http://www.hedgehogs.net/pg/blog/asiablues/read/11617845/eia-inventory-report-analysis-and-key-levels-to-watch-in-the-oil-market-video Tue, 03 May 2016 21:13:49 +0100 http://www.hedgehogs.net/pg/blog/asiablues/read/11617845/eia-inventory-report-analysis-and-key-levels-to-watch-in-the-oil-market-video <![CDATA[EIA Inventory Report Analysis and Key Levels to Watch in the Oil Market (Video)]]> By EconMatters



Last week we had a bearish EIA Report and Oil moved up $3 bucks due to Fund Flows getting ahead of the fundamentals.










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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11617814/australia-cuts-rate-25-bps-higher-a-impedes-recovery Tue, 03 May 2016 06:34:33 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11617814/australia-cuts-rate-25-bps-higher-a-impedes-recovery <![CDATA[Australia cuts rate 25 bps, higher A$ impedes recovery]]>     Australia's central bank cut its benchmark cash rate by 25 basis points to 1.75 percent, a move that was expected by some economists, following an unexpected fall in first quarter inflation.
    The Reserve Bank of Australia (RBA), which last cut its rate one year ago, said the subdued growth in labour costs and very low cost pressures around the world point to a lower outlook for inflation that previously forecast.
    Australia's headline inflation rate declined to 1.3 percent the first quarter of this year from 1.7 percent in the final 2015 quarter, immediately triggering speculation in financial markets that the RBA could cut rates today.
    Last month the RBA had flagged that it could cut its rate if inflation didn't start to pick up, saying continued low inflation would provide scope for easier policy to lend support to demand.
    In contrast, the RBA did not issue a guidance about its future policy decisions today, a likely sign that it will maintain rates in coming months.
    RBA Governor Glenn Stevens said the bank's monetary policy had been accommodative for some time and low interest rate had helped support demand and the lower exchange rate of the Australian dollar had helped economic activity.
    But Stevens added that "an appreciating exchange rate could complicate this," echoing his statement from last month that the central bank would be concerned about a rising exchange rate.
    "In Australia, the available information suggests that the economy is continuing to rebalance following the mining investment boom," Stevens said, growth should continue this year though probably at a more moderate pace than in 2015.
    The RBA said it had taken "careful note of developments in the housing market," as part of its decision to cut the rate, but there are signs prices pressures are easing due to supervisory measures and the "potential risks of lower interest rates in this area are less than they were a year ago."
    "Taking all these considerations into account, the Board judged that prospects for sustainable growth the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting," Stevens said.
     The core inflation rate in the first quarter of this year fell to 1.67 percent from 2.15 percent in the last quarter of 2015. The RBA targets inflation of 2 - 3 percent.
    Australia's economy expanded by an annual rate of 3.0 percent in the last quarter of 2015, up from 2.7 percent in the third quarter.
    After depreciating against the U.S. dollar since September 2014, the Australian dollar - known as the Aussie - has been rising since mid-January on the back of higher iron ore prices. Just over half of the world's iron ore exports come from Australia.
    The slowdown in China's economy dented demand for Australian commodities and in 2015 the Aussie lost 11 percent against the dollar.
    In response to the rate cut, the Aussie fell sharply to 1.323 to the dollar from 1.297 before the news, but it is still up 3.5 percent since the beginning of this year.


    The Reserve Bank of Australia issued the following statement:

"At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.75 per cent, effective 4 May 2016. This follows information showing inflationary pressures are lower than expected.
The global economy is continuing to grow, though at a slightly lower pace than earlier expected, with forecasts having been revised down a little further recently. While several advanced economies have recorded improved conditions over the past year, conditions have become more difficult for a number of emerging market economies. China's growth rate moderated further in the first part of the year, though recent actions by Chinese policymakers are supporting the near-term outlook.
Commodity prices have firmed noticeably from recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.
Sentiment in financial markets has improved, after a period of heightened volatility early in the year. However, uncertainty about the global economic outlook and policy settings among the major jurisdictions continues. Funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative.
In Australia, the available information suggests that the economy is continuing to rebalance following the mining investment boom. GDP growth picked up over 2015, particularly in the second half of the year, and the labour market improved. Indications are that growth is continuing in 2016, though probably at a more moderate pace. Labour market indicators have been more mixed of late.
Inflation has been quite low for some time and recent data were unexpectedly low. While the quarterly data contain some temporary factors, these results, together with ongoing very subdued growth in labour costs and very low cost pressures elsewhere in the world, point to a lower outlook for inflation than previously forecast.
Monetary policy has been accommodative for quite some time. Low interest rates have been supporting demand and the lower exchange rate overall has helped the traded sector. Credit growth to households continues at a moderate pace, while that to businesses has picked up over the past year or so. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.
In reaching today's decision, the Board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate. At present, the potential risks of lower interest rates in this area are less than they were a year ago.
Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting."

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http://www.hedgehogs.net/pg/blog/asiablues/read/11617808/chipotle-mexican-grill-stock-analysis-522016-video Tue, 03 May 2016 06:23:52 +0100 http://www.hedgehogs.net/pg/blog/asiablues/read/11617808/chipotle-mexican-grill-stock-analysis-522016-video <![CDATA[Chipotle Mexican Grill Stock Analysis 5-2-2016 (Video)]]> By EconMatters


We look at this one time momentum stock from a mini case study perspective regarding some of the issues this company faces in trying to recover from the food safety issues of recent memory, and move forward as a growth stock for the next decade.







© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11617287/this-week-in-monetary-policy-angola-australia-albania-kazakhstan-czech-rep-romania-mexico-and-poland Sun, 01 May 2016 19:05:42 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11617287/this-week-in-monetary-policy-angola-australia-albania-kazakhstan-czech-rep-romania-mexico-and-poland <![CDATA[This week in monetary policy: Angola, Australia, Albania, Kazakhstan, Czech Rep., Romania, Mexico and Poland]]>
    This week (May 2 through May 7) central banks from 8 countries or jurisdictions are scheduled to decide on monetary policy: Angola, Australia, Albania, Kazakhstan, Czech Republic, Romania, Mexico and Poland.
    Following table includes the name of the country, the date of the next policy decision, the current policy rate, the result of the last policy decision, the change in the policy rate year to date, the rate one year ago, and the country’s MSCI classification.
    The table is updated when the latest decisions are announced and can always accessed by clicking on This Week.

WEEK 18
MAY 2 - MAY 7, 2016:
COUNTRY       DATE           RATE      LATEST        YTD     1 YR AGO    MSCI
ANGOLA 2-May 14.00% 200 300 9.25%
AUSTRALIA 3-May 2.00% 0 0 2.00%       DM
ALBANIA 4-May 1.50% -25 -25 2.00%
KAZAKHSTAN 5-May 17.00% 0 100 5.50%       FM
CZECH REPUBLIC 5-May 0.05% 0 0 0.05%       EM
ROMANIA 5-May 1.75% 0 0 1.75%       FM
MEXICO 5-May 3.75% 0 50 3.00%       EM
POLAND 6-May 1.50% 0 0 1.50%       EM


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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615539/dominican-rep-maintains-rate-inflation-to-rise-to-target Fri, 29 Apr 2016 23:12:42 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615539/dominican-rep-maintains-rate-inflation-to-rise-to-target <![CDATA[Dominican Rep. maintains rate, inflation to rise to target]]>     The Central Bank of the Dominican Republic (CBDR) left its monetary policy rate unchanged at 5.0 percent, saying this took into account that inflation is expected to converge to the lower level of its target range within the policy horizon and market expectations are around that forecast.
    The CBRD, which has maintained its rate since last cutting it in July 2015, added that domestic economic activity was evolving positively and Gross Domestic Product was estimated to have expanded by an annual rate of 6.1 percent in the first quarter, the same as in the fourth quarter of last year.
   Inflation eased to 1.59 percent in March, down from 1.74 percent in February, while core inflation was 1.52 percent, the central bank said.
    The bank targets inflation of 4.0 percent, plus/minus 1 percentage point.

    www.CentralBankNews.inf

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615534/colombia-raises-rate-8th-time-to-push-down-inflation Fri, 29 Apr 2016 22:54:05 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615534/colombia-raises-rate-8th-time-to-push-down-inflation <![CDATA[Colombia raises rate 8th time to push down inflation]]>     Colombia's central bank raised its policy rate for the eight month in a row, saying this was "to ensure that inflation converges to the target in 2017 and contributes to the reduction in the current account deficit."
    The Central Bank of Colombia raised its policy rate by a further 25 basis points to 7.00 percent and has now raised it by 250 basis points since September last year when it embarked on a tightening cycle. In 2016 it has raised the rate by 125 points.
    Inflation in Colombia rose to 7.98 percent in March from 7.59 percent in February to the highest rate since October 2001, with the central bank attributing the pressure on inflation to the sharp increase in food prices and the partial transfer of the devaluation of the peso to domestic prices.
    At the same time, the central bank said the risk of an excessive slowdown in domestic demand remains moderate.
    The central bank added that it was committed to keeping inflation and expectations anchored to its target of 3.0 percent - plus/minus 1 percentage point -  recognizing that the increase in inflation is of a transitory nature.


    The Central Bank of Colombia issued the following statement:


"The Board of the Bank of the Republic in its meeting today decided to increase the interest rate by 50 bp intervention and stood at 7.0%. In this decision, the Board took into consideration mainly the following aspects:

  • In March annual consumer inflation and average basic inflation measures increased and stood at 7.98% and 6.29%, respectively. Measures of inflation expectations of analysts to one and two years are 4.5% and 3.8%, and those arising from public debt papers 2, 3 and 5 years between 4.4% and 4.8%.

  • The sharp increase in food prices and the nominal depreciation and partial transmission consumer prices remain largely explaining the rise in inflation. Despite being temporary shocks, the magnitude of the devaluation of the peso and the strength of El Niño have raised the risk of a slower convergence of inflation to the target, both because of its direct impact on prices and expectations inflation activation of indexation mechanisms.  

  • The new information suggests that global economic activity in 2016 the average growth of trading partners is weak and lower than in 2015. The Federal Reserve of the United States unchanged its benchmark interest rate and is likely to hardening of monetary policy in that country is given more slowly. The price of oil rose and stood above that projected for this year. In this environment, measures country risk fell and the peso appreciated against the dollar.

  • The information for the first quarter of 2016 indicates that consumption grew at a similar pace than one quarter ago and investment slowed. On the supply side, indicators of industry, trade and production of coffee suggest a favorable performance, while mining reported deterioration. Thus for the first quarter of this year the technical team projects a likely growth of 2.5%, contained in a range between 1.8% and 3.2%. 2016 for all growth would be between 1.5% and 3.2%, with 2.5% as more feasible figure. 

  • 2016 is expected to reduce the current account deficit in both dollars (15.948 billion) as a proportion of GDP (5.9%). 

In short, the sharp increases in food prices and the partial transfer of the devaluation last domestic prices continue toexert pressure on inflation. Inflation expectations remain high. This in a context where there is overspending on national income and the risk of an excessive slowdown in domestic demand remains moderate. In order to ensure that inflation converges to the target in 2017 and contribute to the reduction in the deficit of the current account, the Board decided toincrease by 50 bp interest rate reference. 
The Board will continue to monitor the expected spending adjustment and consistency with the income level of long -term sustainability of the external deficit and overall macroeconomic stability. It also reaffirms the commitment to keep inflation and its expectations anchored to the target, recognizing that there is an increase in inflation transitory nature."


    www.CentralBankNews.info


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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615491/russia-maintains-rate-but-shifts-to-easing-bias Fri, 29 Apr 2016 14:07:50 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615491/russia-maintains-rate-but-shifts-to-easing-bias <![CDATA[Russia maintains rate but shifts to easing bias]]>     Russia's central bank left its key interest rate unchanged at 11.0 percent, as expected, but adopted an easing bias by saying it would "resume a gradual lowering of its key rate at one of its forthcoming board meetings" if it becomes more confident hat the inflation target will be achieved.
    At its previous meeting in March, the board of the Bank of Russia had maintained a hawkish bias by saying it could keep its tight policy stance for longer than planned as there were still risks that inflation would exceed the bank's target in late 2017.
    The central bank last cut its rate in July 2015 despite frequent calls for cuts to boost growth.
    Russia's inflation in March continued to decelerate, falling to 7.3 percent from 8.1 percent in February for the lowest rate since April 2014 and the central bank estimated that inflation had eased further to 7.3 percent as of April 25.
     The deceleration in inflation is in line with the bank's forecast of inflation dropping below 8 percent in April although inflation is likely to accelerate temporarily mid-year due to base effects.
    "However, further on inflation will continue to go down," the bank said, predicting that inflation will reach about 5.0 percent in April 2017 and its 4.0 percent target in late 2017.
    Earlier this month Russia's economy ministry forecast that inflation would remain above 4 percent in 2017 and 2018 though the finance minister has said talks were underway to unify inflation goals.
    Despite the positive signs of falling inflation, the central bank pointed to the risk that expectations are only declining slowly, uncertainties surrounding the national budget and wages.
    The central bank was also optimistic about the recovery of Russia's economy, saying it was showing a higher resistance to fluctuations in oil prices as the process of import substitution was making a positive contribution to industrial production and capacity utilization was improving.
    "The on-going shifts in the economy anticipate the beginning of its recovery growth," the central bank said, adding quarterly growth rates are expected to reach positive levels in the second half of this year and early 2017.
    In 2015 Russia's economy contracted by 3.7 percent and is forecast to contract around 1 percent this year.
   The Russian ruble has been appreciating since mid-January and is now up by 14.3 percent this year, trading at 64.2 to the U.S. dollar today, and is now only 7 percent below the start of 2015.


    The Bank of Russia released the following statement:



On 29 April 2016, the Bank of Russia Board of Directors decided to keep its key rate at 11.00% p.a. The Board of Directors sees the positive processes of inflation slowdown and inflation expectations decline, as well as shifts in the economy which anticipate the beginning of its recovery growth. At the same time, inflation risks remain elevated. These risks primarily stem from slowly declining inflation expectations against the target, uncertainty in parameters of the national budget, and ambiguity of the observed movements in nominal wages. Moving forward, should inflation risks fall as much as to ensure with greater certainty that the Bank of Russia achieves its inflation target, the Bank of Russia will resume a gradual lowering of its key rate at one of its forthcoming Board meetings. The Bank of Russia predicts, consistent with the decision, the annual inflation to stand at about 5% in April 2017, to reach the 4% target in late 2017.
In making its key rate decision, the Bank of Russia Board of Directors has proceeded from the following factors.
First. Inflation fell perceptibly; however, the trend bears risks of instability. Slower consumer price growth is triggered by weak demand and gradually descending inflation expectations, driven by, inter alia, the moderately tight monetary policy. Meanwhile, the factors, which are likely to have a temporary impact, have also made a considerable contribution to inflation reduction. They include the Government’s decisions on indexation of wages, pensions, administrated prices and tariffs, as well as a drop in global food prices.
Under the Bank of Russia estimates, the annual consumer price growth rate is down to 7.3% as of 25 April 2016 / as of 25 April 2016 remained at the level of March 2016 of 7.3%. This is in line with the inflation forecast for the year ahead, which the Bank of Russia published in its April 2015 press release (below 8%). In mid-2016, the annual consumer price growth is likely to accelerate temporarily owing to the low-base effect of the previous year. However, further on inflation will continue to go down. The Bank of Russia predicts, consistent with the decision, the annual inflation to stand at about 5% in April 2017, to reach the 4% target in late 2017.
Second. Key macroeconomic indicators show higher resistance of the Russian economy to fluctuations in oil prices. The floating exchange rate partially sets off the negative impact of external shocks. The development of import substitution and expansion of non-commodity exports make a positive contribution to industrial production dynamics. Capacity utilisation indicators have improved. The on-going shifts in the economy anticipate the beginning of its recovery growth. Quarterly GDP growth is expected to reach positive territory in 2016 H2 â€” early 2017.
Third. Interest rates in the economy are set to decline further even with the key rate unchanged. This is mainly driven by the planned Reserve Fund spending to finance the budget deficit and the ensuing changeover in the banking sector to a liquidity surplus.
Fourth. There remain elevated inflation risks. These primarily stem from slowly declining inflation expectations against the inflation target, mixed data on movements being observed in nominal wages, uncertainty in parameters of further wages and pensions indexation, and from the absence of mid-term budget consolidation strategy. Due to the continued supply glut in the oil market, the risks of crude prices dropping and their negative pressure on exchange rate and inflation expectations remain high enough.
Moving forward, should inflation risks fall as much as to ensure with greater certainty that the Bank of Russia achieves its inflation target, the Bank of Russia will resume a gradual lowering of its key rate at one of its forthcoming Board meetings.
The Bank of Russia Board of Directors will hold its next rate review meeting on 10 June 2016. The press release on the Bank of Russia Board decision is to be published at 13:30, Moscow time."

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615272/fiji-holds-rate-inflation-low-despite-shock-from-cyclone Fri, 29 Apr 2016 09:12:19 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615272/fiji-holds-rate-inflation-low-despite-shock-from-cyclone <![CDATA[Fiji holds rate, inflation low despite shock from cyclone]]>      Fiji's central bank left its Overnight Policy Rate (OPR) at 0.5 percent, unchanged since October 2011, saying its twin objectives remain intact and inflation remains low despite the supply-side shock from Tropical Cyclone Winston and recent flooding.
    The Reserve Bank of Fiji (RBF) noted that inflation in March eased to 0.8 percent from 1.2 percent in February and the forecast for end-year is around 2.0 percent, which also reflects lower fuel prices stemming from lower crude oil prices.
    Foreign reserves amounted to US$1.984 billion as of April 28, slightly below $2.006 billion on March 29, but sufficient to cover 5.6 months of imports.
    Barry Whiteside, central bank governor and board chairman, said in a statement Fiji's economy was still on track to achieve its seventh year of expansion, although at a slower pace than earlier expected due to the negative impact of natural disasters and weak demand from trading partners.
    In January the RBF forecast economic growth this year of 3.5 percent, down from 4.0 percent in 2015 and 5.3 percent in 2014 and Whiteside has earlier said Cyclone Winston was expected to lower this growth forecast, notwithstanding the impetus from recovery activities.
    Fiji was struck by Tropical Cyclone Winston on the night of Feb. 20, with wind gusts up to 325 kph (202 mph) that killed 42 people and left more than 62,000 people homeless. The government has estimated damage of 1 billion Fijian dollars, or US$460 million.
     With winds of 296 kph (184 mph), Cyclone Winston was the worst cyclone ever recorded in the Southern Hemisphere, smashing the previous record of 178 mph set by Cyclone Zoe which hit the Solomon Islands in 2002. If Winston had occurred in the Atlantic, it would have been categorized as a Category 5 hurricane.


    The Reserve Bank of Fiji issued the following statement:



"At its monthly meeting on 28 April 2016, the Reserve Bank of Fiji Board agreed to maintain the Overnight Policy Rate at 0.5 percent.

In announcing the decision, the Governor and Chairman of the Board, Mr Barry Whiteside highlighted that “the ongoing weakness in global demand remains a downside risk for Fiji’s exports, tourism and remittance sectors. Nevertheless, windfall gains from the current low global commodity prices, particularly for oil augurs well for many of our key sectors. The Fiji economy is still on track to achieve its seventh year of growth this year, albeit at a slower pace than earlier expected due to the negative impacts of the recent natural disasters and weak trading partner demand.’’

Latest indicators suggest mixed sectoral performances. While better-than-expected performances were recorded by the tourism and mining sectors up to March 2016, declines were noted for the timber and fish industries for the March quarter and the first two months, respectively. Nevertheless, disaster related assistance including member withdrawals from the Fiji National Provident Fund and various facilities offered by financial institutions, coupled with rebuilding and rehabilitation efforts are expected to stimulate consumption and construction activity in the economy. Furthermore, the current situation of favourable monetary conditions and record low interest rates, are expected to provide further impetus for investment and growth.

Amidst these developments, the twin objectives of the Reserve Bank remain intact. Despite the supply-side shock from Tropical Cyclone Winston and the recent flooding, inflation has remained low, falling to 0.8 percent in March from 1.2 percent in February. Year-end inflation is forecast at around 2.0 percent, which takes into account the subdued imported inflation emanating from lower crude oil prices, and the subsequent reductions in domestic fuel prices. Foreign reserves are currently (28 April) $1,984.0 million, sufficient to cover 5.6 months of retained imports of goods and non-factor services.”

Mr Whiteside reiterated that “given the weak global outlook and the adverse effects of the recent spate of natural disasters, supporting economic recovery is vital, while at the same time safeguarding the Bank’s twin objectives. In this regard, the Bank will continue to closely monitor economic developments to identify any potential risks to our monetary policy objectives that would warrant a change in monetary policy.”

    www.CentralBankNews.info


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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615078/egypt-holds-rate-steady-given-lagged-effect-of-march-hike Thu, 28 Apr 2016 23:27:45 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11615078/egypt-holds-rate-steady-given-lagged-effect-of-march-hike <![CDATA[Egypt holds rate steady given lagged effect of March hike]]>     Egypt's central bank left its key policy rates unchanged, as expected, saying they were appropriate given the lagged effect from the sharp hike in March and the balance of risks surrounding the outlook for growth and inflation.
    The Central Bank of Egypt (CBE), which last month raised its key rates by 150 basis points to anchor inflation expectations after devaluing the pound and moving to a more flexible exchange rate regime, said "potential underlying domestic inflationary pressures are still under watch" even as upside risks to inflation were mitigated by subdued international commodity prices.
    The central bank's benchmark overnight deposit rate was left at 10.75 percent, the overnight lending rate at 11.75 percent and  the rate on its main operation at 11.25 percent.
    Egypt's inflation rate eased for the third consecutive month to 9.03 percent in March from February's 9.13 percent to the lowest rate since September last year due to a favorable base effect.
   But core inflation, as calculated by the CBE, rose to 8.41 percent from 7.50 percent in February, manly driven by higher food prices.
    Preliminary data show that Egypt's economy expanded by 3.5 percent in the first half of the 2015/16 fiscal year, which ended Dec. 31, with growth mainly from construction and real estate services despite the continued contraction in tourism and weakness in mining.
    Looking ahead, the CBE said investments in mega projects are expected to continue to contribute to growth but downside risks to the global economy could pose downside risks.
    On March 14 the CBE devalued the pound by almost 13 percent and adopted a more flexible exchange rate policy aimed at relieving years of foreign currency shortage by creating a more favorable investment climate and attract capital inflows.
    At this week's auction, the CBE sold $118.7 million at its official rate of 8.78 to the dollar. Initially, the pound was devalued to 8.85 a dollar from 7.73 but a few days later the exchange rate was moved higher as the new exchange rate regime was announced.
    The central bank has also been trying to do away with the black market for foreign currency where the pound has recently been trading at over 11 to the dollar.
    Egypt has been facing a shortage of foreign currency since the popular uprising in 2011 that resulted in the overthrow of Hosni Mubarak, scaring off foreign tourists and investors. Foreign currency revenue from tourists was dealt another blow in 2013 when the Egyptian army helped remove President Mohamed Morsi.
    In March Egypt's international reserves were $16.56 billion, still well below reserves in excess of $30 billion in the five years preceding the Arab Spring, but up from $16.445 billion end-December.
 
  The Central Bank of Egypt issued the following statement:


"In its meeting held on April 28, 2016, the Monetary Policy Committee (MPC) decided to keep the overnight deposit rate, overnight lending rate, and the rate of the CBE's main operation unchanged at 10.75 percent, 11.75 percent, and 11.25 percent, respectively. The discount rate was also kept unchanged at 11.25 percent.

Annual headline CPI remained at around 9 percent in February and March 2016, after registering 10 percent in January 2016 and 11 percent in December 2015. On the other hand, annual core CPI increased to 8.4 percent in March from 7.5 percent in February. Monthly developments have been largely driven by the rise in food prices.

Looking ahead, while the upside risks to the domestic inflation outlook are mitigated by contained imported inflation, in light of the subdued international commodity prices, potential underlying domestic inflationary pressures are still under watch.

Preliminary data reveal that during 2015/16 H1 GDP at market prices grew by 3.5 percent. Growth came mainly from the construction and real estate services, despite the continued contraction in tourism and the weaknesses in the extractions sector. In the meantime, growth was largely driven by consumption, in addition to a positive contribution of investment. On the other hand, net exports contributed negatively to GDP in H1, driven by weaker exports, while imports have been contributing positively, given their relative decline.

Looking ahead, while investments in domestic mega projects are expected to continue to contribute to economic growth, the downside risks that surround the global economy could pose downside risks to domestic GDP.

At this juncture, and given the expected lagged effect from the previous interest rate hike, the MPC judges that the key CBE rates are currently appropriate given the balance of risks surrounding the inflation and GDP outlooks.

The MPC reiterates its price stability mandate and will continue to closely monitor all economic developments, particularly fiscal policy and its effect on the inflation outlook, and will not hesitate to adjust the key CBE rates to ensure price stability over the medium-term."

    www.CentralBankNews.info

 

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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11614745/moldova-cuts-rate-3rd-time-this-year-on-falling-inflation Thu, 28 Apr 2016 15:56:51 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11614745/moldova-cuts-rate-3rd-time-this-year-on-falling-inflation <![CDATA[Moldova cuts rate 3rd time this year on falling inflation]]>     Moldova's central bank cut its base rate for the third time this year on declining inflation.
    The National Bank of Moldova (NBM) cut its rate by another 200 basis points and has now cut its rate by 450 points this year following cuts in March and February.
    The central bank also lowered the rate on overnight rate loans to 18.0 percent from 20 percent and the overnight deposit rate to 12 percent from 14 percent while the ratio on required reserves in convertible currency was left steady at 14 percent along with the ratio on leu and non-convertible currencies at 35 percent.
   The central bank noted that inflation had declined for the third month in a row and although it still remains above the upper limit of its target range, it is heading toward the midpoint of its target.
    Moldova's inflation rate fell to 9.4 percent in March from 10.3 percent in February and 13.4 percent in January.
    The NBM targets inflation of 5.0 percent, within a upper limit of 6.5 percent and a lower limit of 3.5 percent.
    According to the central bank's latest forecast, inflation is seen returning to its target range in the third quarter of this year for an average rate of 7.0 percent before easing to 4.8 percent in 2017.
    The forecast for 2016 inflation was lowered by 3.1 percentage points and 1.8 percentage points for 2017.
    Details of the new inflation forecast will be published on May 5, the bank added.

    www.CentralBankNews.info

   
   

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