<![CDATA[Hedgehogs.net: Ken Yeadon's connections' blogs]]> http://www.hedgehogs.net/pg/blog/keny/friends/?view=rss http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505107/central-bank-news-link-list-may-29-2015-g7-unconcerned-about-latest-bond-market-volatility-source Fri, 29 May 2015 04:43:06 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505107/central-bank-news-link-list-may-29-2015-g7-unconcerned-about-latest-bond-market-volatility-source <![CDATA[Central Bank News Link List - May 29, 2015: G7 unconcerned about latest bond market volatility â source]]>
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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11505107
http://www.hedgehogs.net/pg/blog/asiablues/read/11505100/us-oil-production-sets-new-modern-record-last-week Fri, 29 May 2015 02:33:22 +0100 http://www.hedgehogs.net/pg/blog/asiablues/read/11505100/us-oil-production-sets-new-modern-record-last-week <![CDATA[US Oil Production Sets New Modern Record Last Week]]> By EconMatters

EIA Report

I looked over the weekly Petroleum Inventory Report put out by the EIA today, and the biggest takeaway by far was that US Oil Production set a new modern era high at 9.566 Million Barrels per day. The last high in US Production occurred in March, and it appeared that the US Production numbers were getting slightly weaker, and maybe the top in US Production was in. But this past week Production really ramped back up with a blowout number, and if it wasn`t for a week in which imports were unusually low for the week, there would have been another huge build in Oil Inventories for the week.

Energy Storage Hubs


Refineries were operating near full capacity on the week cranking out a utilization rate just shy of 94%, which also helped avoid another weekly inventory build in oil supplies. However, Cushing Oklahoma and the Gulf Coast Region barely budged in reducing the oil inventory surplus at those two crucial storage hubs. Cushing Oklahoma still has 60 Million Barrels stuck in storage facilities, while the Gulf Coast has 242 Million Barrels awaiting refinery for end use.


Shale Industry

However, the noteworthy takeaway is that despite a large reduction in drilling rigs, and the lower prices of the last year US Oil Production is still going up, and not tapering off at all! So much for the Saudi and OPEC strategy of putting a dent in US Oil Production by not cutting production and hoping to gain market share for their oil by putting the Shale Industry out of business.


Annual Comparison


For example, a year ago US Oil Production was 8.472 Million Barrels per day, and now after a market share price war between OPEC and the US Producers, the US is producing a record level of Production, a new modern era record since the EIA began tracking this data in 1983 at 9.566 Million Barrels per day. This is an increase of over 1 Million Barrels per day in US Oil Production in a year`s time, and considering the decline in drilling rigs, this speaks volumes about the increased efficiencies taking place in a lower price and cost environment.


Market Reaction



The oil keeps coming out of the ground at record levels, and throw in OPEC`s record output, and it doesn`t bode well for oil prices the second half of the year once the summer driving season ends and we start the building season all over again in oil inventories! We really are at risk of both the Cushing and Gulf Coast storage hubs reaching their storage limits over the next year, and it will be interesting how the oil market deals with this reality. 

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11505100
http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505091/fiji-holds-rate-notes-rising-imports-australia-slowdown Thu, 28 May 2015 20:03:03 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505091/fiji-holds-rate-notes-rising-imports-australia-slowdown <![CDATA[Fiji holds rate, notes rising imports, Australia slowdown]]>     Fiji's central bank maintained its benchmark Overnight Policy Rate at 0.5 percent but cautioned that rising imports in connection with an expanding economy coupled with a likely slowdown in Fiji's key trading partners, particularly Australia, could "weaken our external position."
    The Reserve Bank of Fiji (RBF), which has held its rate steady since November 2011, said all sectors of the economy were performing positively and economic activity was continuing to strengthen, propelled by increased consumption and investment.
    Currently, the RBF's dual mandate remains stable, RBF Governor Barry Whiteside said in a statement, noting that inflation eased to 1.5 percent in April from 2.4 percent in March while foreign reserves amounted to some $1.877 billion as of May 28 compared with some $1.857 billion at the end of April.

    The Reserve Bank of Fiji issued the following statement:

   

"At its monthly meeting on 28 May, the Reserve Bank of Fiji Board decided to maintain the Overnight Policy Rate at 0.5 percent.
In conveying the decision, the Governor and Chairman of the Board, Mr Barry Whiteside highlighted that, “performances across all sectors of the economy were positive, buoyed by the favourable financial conditions. While a slowdown in private sector credit was noted in February and March, the momentum picked up again in April. Economic activity continues to strengthen backed by increased consumption and investment.”
Mr Whiteside added that, “risks from rising import demand associated with a growing economy coupled with a likely slowdown in Fiji’s key trading partner economies, particularly Australia, could weaken our external position.”
Currently the dual mandate of the Bank remains stable. Inflation slowed to 1.5 percent in April from 2.4 percent in March, owing to lower fuel prices while foreign reserves are currently (28 May) around $1,877 million, sufficient to cover 4.7 months of retained imports of goods and non-factor services.
The Chairman reiterated that, “the Bank will continue to closely monitor economic developments for any potential risks to the Bank’s twin objectives and align monetary policy accordingly.”

    www.CentralBankNews.info



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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505086/ukraine-holds-rate-but-looks-to-cut-when-fx-stabilizes Thu, 28 May 2015 19:03:10 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505086/ukraine-holds-rate-but-looks-to-cut-when-fx-stabilizes <![CDATA[Ukraine holds rate but looks to cut when FX stabilizes]]>     Ukraine's central bank maintained its benchmark discount rate at 30 percent to help stabilize the the domestic money and foreign exchange markets but is looking towards loosening its policy in "the near future" as the hryvnia's exchange rate stabilizes.
   The National Bank of Ukraine (NBU), which has raised its rate by 16 percentage points this year and by a total of 23.50 percentage points since April 2014, said a stable money market would help restore the monetary transmission mechanism and thus enable banks to provide lending to underpin growth should monetary policy be loosened.
    Members of the central bank's monetary policy committee "raised concerns over the Ukrainian economy sliding into a protracted recession," noting that the output of key sectors shrank by 23.4 percent in April and "heightened risks" that the economy would slow down dramatically.
    However, the NBU added that the current level of the discount rate would "help ensure a firm downward path of inflation and encourage the return of household deposits to the banking system."
    In April the stock of hryvnia deposits by households rose by 4.2 billion, a sign that the public confidence in the banking sector was "gradually being restored."
    Ukraine's hryvnia started falling in February last year after pro-Russian forces occupied the Crimean peninsula and continue to tumble as armed conflict broke out in Eastern Ukraine.
    In 2014 the hryvnia depreciated by almost 50 percent against the U.S. dollar but following a cease-fire agreement in February, rate hikes and a series of administrative measures by the central bank, the hryvenia has stabilized since March.
    Today the hryvnia was trading at 21.22 to the dollar for a 26 percent decline since the start of this year but much stronger than its low of 33.7 in mid-February. Compared with the start of 2014, the hryvenia has lost 61 percent of its value.
    The NBU said the official UAH/USD exchange rate had fluctuated within a range of 21.4 to 23.5 throughout April and then in May by a narrower range of 20.6 to 20.8 to the dollar.
    Inflation, however, has continued to accelerate, hitting 60.9 percent in April from 45.8 percent in March, boosted by an increase in utility and natural gas tariffs but also by "peculiarities" in the collection method used the statistics office, the central bank said.

    Instead of reacting to the current inflation rate, the NBU said it was taking a forward-looking approach that takes into account inflation expections and it expects inflation to slow down considerably over the next 12 months.
    Ukraine's economy shrank by an annual 17.6 percent in the first quarter of this year, the fifth quarter in a row of contraction. In 2014 Ukraine's Gross Domestic Product fell by 6.8 percent and the International Monetary Fund has forecast a decline of 5.5 percent this year.
    Earlier this month Ukraine's parliament adopted a bill that would strengthen the central bank's independence and institutional capacity.

    The National Bank of Ukraine issued the following statement:
 

"On May 27-28, 2015, the Monetary Policy Committee of the National Bank of Ukraine (hereinafter – the Committee) held its regular meeting.

The meeting discussed the possible scenarios for future economic and monetary developments and considered the expediency of changing the parameters of monetary instruments.

The Committee members pointed to the sustained positive trends in the money market. In April-May, in particular, the impact that the behavioural factor had on the exchange-rate path was significantly limited, amid the gradual appreciation of the hryvnia. Thus, the official UAH/USD exchange rate fluctuated within the range of UAH 21.4 â€“ 23.5 per USD 1 throughout April, while in May it moved within the range of UAH 20.6 – 20.8 per USD 1.

The public confidence in the banking sector was gradually being restored. In April 2015, the stock of household hryvnia deposits increased by UAH 4.2 billion.

At the same time, consumer inflation accelerated sharply (to 60.9% year-on-year in April). The spike in inflation was driven by increases in utility and natural gas tariffs. The high CPI figure was also attributed to peculiarities of the data collection procedure of the State Statistics Service of Ukraine.

The Committee members pointed out that the National Bank of Ukraine should take a forward-looking approach by using the available instruments to provide an adequate response consistent with the projected inflation path, taking into account inflationary expectations of households and businesses, rather than responding to the current inflation rate.  After hitting its peak, inflation is expected to slow down considerably over the next 12 months.

The Committee members present at the meeting noted the monetary policy should focus on restraining the second-round effects of inflationary shocks that had already materialized.

The Committee members raised concerns over the Ukrainian economy sliding into a protracted recession: the annual rate of decline in the index of key sectors output deepened to 23.4% in April 2015. Accordingly, heightened risks remained that the economy would slow down dramatically.  

Under such macroeconomic conditions, the shared opinion of the Committee members is that the major contribution that monetary policy can make to the economic recovery is to put the money market, notably its foreign exchange segment, back on track. This microfinancial stabilization will help restore an efficient monetary transmission mechanism and enable the banking system to provide lending to the economy to underpin growth, should the National Bank of Ukraine loosen the monetary policy.

In view of the above, and given the need to put the money market firmly on the path to stabilization, the Committee members concurred in the expediency of keeping the discount rate at 30%.

This level of the discount rate will help ensure a firm downward path of inflation and encourage the return of household deposits to the banking system.

As the risks to the hryvnia stability subside, it raises the prospects of the monetary policy stance being loosened in the near future."




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11505086
http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505070/canada-holds-rate-to-check-effect-of-high-c-if-sustained Wed, 27 May 2015 15:23:02 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505070/canada-holds-rate-to-check-effect-of-high-c-if-sustained <![CDATA[Canada holds rate, to check effect of high $C if sustained]]>     Canada's central bank kept its policy rate steady at 0.75 percent, as widely expected, but cautioned that if the recent strengthening of the Canadian dollar on the back of higher oil prices and a softer U.S. dollar is sustained, the "net effect will need to be assessed as more data become available in the months ahead."
     The Bank of Canada (BOC), which surprised markets by cutting its rate by 25 basis points in January to counter some of the dampening impact on the economy from the fall in oil prices, added that inflation and economic growth was largely in line with its assessment in April and the "assessment of risks to the inflation profile has not materially changed."

     The Bank of Canada issued the following statement:


"The Bank of Canada today announced that it is maintaining its target for the overnight rate at 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.
Inflation in Canada continues to track the path outlined in the Bank’s April Monetary Policy Report (MPR). Total CPI inflation is near the bottom of the Bank's 1 to 3 per cent inflation control range, largely due to the transitory effects of sharply lower energy prices. Core inflation remains above 2 per cent, boosted by the pass-through effects of past depreciation of the Canadian dollar, as well as certain sector-specific factors. Seeing through the various temporary factors, the Bank estimates that the underlying trend of inflation is 1.6 to 1.8 per cent, consistent with persistent slack in the economy. 
The outlook for the Canadian economy also remains largely in line with the April MPR. While a weak first quarter in the United States has raised questions about that economy’s underlying strength, the Bank expects a return to solid growth in the second quarter. This will help advance the rotation of demand in Canada toward more exports and business investment. Recent indicators suggest consumption in Canada is holding up relatively well, given the impact of lower oil prices on gross domestic income.
Despite the recent back-up in global bond yields, financial conditions for Canadian households and firms remain highly stimulative. The Canadian dollar has strengthened in recent weeks in the context of higher oil prices and a softer U.S. dollar. If these developments are sustained, their net effect will need to be assessed as more data become available in the months ahead.
Although a number of complex adjustments are under way, the Bank’s assessment of risks to the inflation profile has not materially changed. Risks to financial stability remain elevated, but appear to be evolving as expected. Weighing all of these risks, the Bank judges that the current degree of monetary policy stimulus remains appropriate and therefore the target for the overnight rate remains at 3/4 per cent."


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11505070
http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505063/central-bank-news-link-list-may-27-2015-dont-expect-bank-of-canada-to-follow-the-feds-lead-on-rates Wed, 27 May 2015 14:03:02 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505063/central-bank-news-link-list-may-27-2015-dont-expect-bank-of-canada-to-follow-the-feds-lead-on-rates <![CDATA[Central Bank News Link List - May 27, 2015: Donât expect Bank of Canada to follow the Fedâs lead on rates]]>
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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11505063
http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505021/kyrgyzstan-pushes-number-of-2015-rate-cutters-to-36 Tue, 26 May 2015 15:23:08 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505021/kyrgyzstan-pushes-number-of-2015-rate-cutters-to-36 <![CDATA[Kyrgyzstan pushes number of 2015 rate cutters to 36]]>
    A total of 36 central banks and monetary authorities worldwide have eased their policy stance so far in 2015 while 14 have tightened their policy, with the National Bank of the Kyrgyz Republic joining the rate-cutting spree on May 25 by cutting its policy rate by 150 basis points.
    From July 2014 through January this year, the central bank of Kyrgyzstan raised its policy rate by a total of 500 basis points to curb inflationary pressures from a depreciation of the som currency. But since late April the som's exchange rate has bounced back and inflation has eased steadily after hitting 11.6 percent in January.
    Central Bank News, which already tracks the policy rates of 90 central banks worldwide, recently expanded its list of products to include Global Monetary Policy Changes (GMPC), a country-by-country overview of changes to monetary policy.
    GMPC aims to capture changes to a wide range of monetary policy instruments, such as reserve requirements, bond purchases or exchange rates, in addition to changes to key interest rates. Major central banks have resorted to unconventional monetary policy measures to stimulate economic activity after cutting rates to effectively zero in the wake of the global financial crises.
     GMPC complements Central Bank News’ other products, such as the the Global Interest Rate Monitor (GIRM), which tracks official policy rates, and Global Monetary Policy Highlights (GMPH), which covers key events in monetary policy and includes a summary of rate changes each month.

    Following is an alphabetical list of countries that have changed their monetary policy this year. The list is updated and can be accessed on the Central Bank News website under the heading of "Easier or Tighter?" as soon as central banks announce changes to their policy.

ALBANIA
Jan 28: key rate cut 25 bps to 2.00%, easy monetary conditions to be maintained some quarters ahead to achieve inflation target
ANGOLA
Feb 13: rate on liquidity absorbtion facility cut 175 bps to 0.0% at extraordinary meeting following government 2015 program
Mar 30: basic interest rate raised 25 bps to 9.25% as inflation rises, kwanza depreciates and credit rises
ARMENIA
Jan. 22: repo rate raised 100 bps to 9.50% to support demand, foster sustainable growth and inflation 
Feb 10: repo rate raised 100 bps to 10.50% to reduce short-term market rates, stabilize financial markets and ensure inflation objective
AUSTRALIA
Feb. 3: cash rate cut 25 bps to 2.25% to boost demand, economic growth and inflation
May 5: cash rate cut 25 bps to 2.00% to boost household demand but no guidance issued.
BELARUS
Jan 8: National Bank enacts series of measures to stabilize Belarus ruble and money markets, including raising repo rate 500 bps to 25.00%, overnight deposit rate raised to 20%, reserve requirement on FX cut to 12.50% and then to 10.00% in February in light of lack of ruble funds. Pegging of Belarus ruble to FX basket resumes.
BOTSWANA
Feb 18: bank rate cut 100 bps to 6.5% as economic outlook and inflation provides scope for easing
BRAZIL
Jan 21: Selic rate raised 50 bps to 12.25% in unanimous decision, no bias
Mar 4: Selic rate raised 50 bps to 12.75% in unanimous decision, no bias
Apr 29: Selic rate raised 50 bps to 13.25% in unanimous decision, no bias
BULGARIA
Dec 30, 2014: January base rate cut by 1 bps to 0.01%
CANADA
Jan. 21: benchmark target for overnight rates cut 25 bps to 0.75% in response to sharp drop in oil prices that will be negative for growth and inflation
CAPE VERDE
Feb 13: policy rate cut 25 bps to 3.50%, reserve requirement cut 300 bps to 15.0% to boost growth and fight "scenario of deflation"
CHINA
Feb 4: reserve requirement for big banks cut 50 bps to 19.50% to free up up to 600 billion yuan held as bank reserves
Feb 28: benchmark 1-year lending rate cut 25 bps to 5.35% and 1-year deposit rate cut 25 bps to 2.50% to counter dampening impact on economy from rise in real interest rates from falling inflation 
Apr 19: reserve requirement for big banks cut 100 bps to 18.50% to counter slowdown in industrial output and retail sales
May 10: benchmark 1-year lending rate cut 25 bps to 5.10% and 1-year deposit rate cut 25 bps to 2.25% as economy faces "greater downward pressure" while inflation remains low
COSTA RICA
Feb 2: policy rate cut 50 bps to 4.75%
Mar 19: policy rate cut 25 bps to 4.50%
Apr 23: policy rate cut 25 bps to 4.00%
DENMARK
Jan 19: Lending rate cut 15 bps to 0.05%, deposit rate cut 15 bps to -0.20% following purchase of FX in market
Jan. 22: Deposit rate cut 15 bps to -0.35% following purchase of FX in market
Jan. 29: deposit rate cut 15 bps to -0.50% following purchase of FX in market
Jan. 30: Danish government suspends issuance of domestic and foreign bonds to limit FX inflow
Feb. 5: deposit rate cut 25 bps to -0.75% following purchase of FX in market. Danmarks Nationalbank says it has necessary instruments to defend fixed exchange rate
DOMINICAN REPUBLIC
April 30: Policy rate cut 50 bps
March 30: Policy rate cut 50 bps
May 3: monetary policy interest rate cut 50 bps to 5.25% as inflation expected to remain below lower bound
EGYPT
Jan. 15: deposit rate cut 50 bps to 8.75% in surprise move as upside risks from imported inflation are contained due to lower oil and food prices
EURO AREA
Jan. 22: Governing council decides to launch expanded asset purchase program in March, with combined monthly purchases of euro-area government and European institutions of 60 billion euros. Programme intended to be carried out until end of September 2016 and until "sustained adjustment in path of inflation."  
GAMBIA
May 7: rediscount rate raised 100 bps to 23.00% along with more intense market operations due to persitent inflationary pressure
GEORGIA
Feb 11: repo rate raised 50 bps to 4.50%, as predicted by governor, and central bank expects further rate rise to 5.0% by end-2015
May 6: repo rate raised 50 bps to 5.00% and will be raised to 5.50% end-year on risk inflation will exceed target
GHANA
May 13: monetary policy rate raised 100 bps to 22.00% to rein-in inflation and inflation expectations along with sustained fiscal consolidation.
GUATEMALA
Feb 25: leading interest rate cut 50 bps to 3.50% as inflation is forecast to remain below the central bank's target. Central bank says will take timely actions to keep inflation close to medium-term target.
HUNGARY
Mar 24: base rate cut 15 bps to 1.95%, "cautious easing" may continue.
Apr 21: base rate cut 15 bps to 1.80%, "cautious easing" may continue.
May 26: base rate cut 15 bps to 1.65%, "cautious easing" may continue
INDIA
Jan. 14: repo rate cut 25 bps to 7.75% in unscheduled move in response to falling inflation. Further easing based on continuing disinflation
Mar 3: repo rate cut 25 bps to 7.50% in another unscheduled move with reserve bank governor describing it as a pre-emptive move in light of softer inflation. Further adjustment to depend on data.   
INDONESIA
Feb 17: BI rate cut 25 bps to 7.50% on confidence that inflation will remain within target corridor
May 19: Loan-to-deposit (LDR) ratio and loan-to-value (LTV) policy for mortgages and car loans to be loosened to "keep the economic growth momentum."
IRAN
April 18: Annual deposit rate cut 200 bps to 20% on lowered inflation forecast
ISRAEL
Feb 23: benchmark interest rate cut 15 bps to 0.10% to counter negative impact on economic activity and inflation from recent appreciation of shekel.
JAMAICA
Apr 16: rate on 30-day certificate of deposit cut by 25 bps to 5.50% as inflation expected to remain low 
JORDAN
Feb 2: discount rate cut 25 bps to 4.00% following rise in foreign reserves and improved inflation outlook
KYRGYZSTAN
Jan 26: policy rate raised 50 bps to 11.00% to curb inflation pressures from depreciation of som, appropriate measures to be taken to reduce inflation to target
May 26: policy rate cut 150 bps to 9.50% as inflation falls further
MOLDOVA
Jan 29: base rate raised 200 bps to 8.50%, reserve requirement raised 200 bps to 16.00%
Feb 17: base rate raised 500 bps to 13.50% at extraordinary board meeting in response to leu depreciation 
Apr 30: reserve requirement raised 200 bps to 20.00%
MONGOLIA
Jan 16: policy rate raised 100 bps to 13.00% to dampen demand, curb current account deficit and keep inflation low and stable
NAMIBIA
Feb 18: Repo rate raised 25 bps to 6.25% on continuing concern over high growth in household credit used on "unproductive goods" such as cars and luxury goods
PAKISTAN
Jan. 24: policy rate cut 100 bps to 8.50% due to improving economy, declining inflation, rising FX reserves and contained fiscal deficit. Inflation forecast revised down
Mar 21: policy rate cut 50 bps to 8.00% due to trend of falling inflation
May 23: key rates cut 100 bps with ceiling rate cut to 7.0% and floor rate at 5.0%, new target rate set at 6.50%
PERU
Jan. 15: policy rate cut 25 bps to 3.25% on continued weak growth but says this doesn’t imply successive rate cuts
Jan. 27: reserve requitement for domestic currency cut 50 bps to 8.50%
Feb 26: reserve requirement for domestic currency cut 50 bps to 8.00%
Mar 30: reserve requirement for domestic currency cut 50 bps 7.50%
Apr 27: reserve requirement for domestic currency cut 50 bps to 7.50%
POLAND
Mar 4: policy reference rate cut 50 bps to 1.50% in expected move to avoid prolonged period of deflation. Central bank lowers inflation forecasts but says it has now ended its easing cycle.
ROMANIA
Jan. 7: policy rate cut 25 bps to 2.50%, rate corridor narrowed 25 bps 2.25 pct points as inflation forecast to remain below lower bound of target range
Feb. 4: policy rate cut 25 bps to 2.25%, rate corridor narriwed 25 bps to 2.00 pct points as inflation forecast lowered
Mar 31: policy rate cut 25 bps to 2.00%, rate corridor narrowed 25 bps to 1.75 pct points as data shows inflation will rise but remain below lower bound of target range
May 6: policy rate cut 25 bps to 1.75%, rate corridor narrowed 25 bps to 1.50 pct points, reserve requirement on leu cut 200 bps to 8.00% after inflation forecast cut
RUSSIA
Jan 30: key rate cut 200 bps to 15.00% to avert "sizable decline in economic activity"
Mar 13: policy rate cut 100 bps to 14.00% and central bank says ready to continue ctting as inflation risks abate
Apr 30: key rate cut 150 bps to 12.50% and central bank says ready to cut further as inflationary risks continue to weaken
SERBIA
Mar 12: key policy rate cut by 50 bps to 7.50%, further changes depend on how commodity prices and international risks affect inflation 
Apr 9: key policy rate cut 50 bps to 7.00% to curb disinflationary pressures from low demand
May 11: key policy rate cut 50 bps to 6.50% as inflation is moving below the tolerance band and inflation pressures are subdued. Interest rate corridor around key rate narrowed to plus/minus 2.00% from 2.50%
SIERRA LEONE
Mar 23: monetary policy rate cut 50 bps to 9.50% to stimulate growth to promote growth against twin shocks of Ebola and fall in commodity prices, particularly iron iron
SINGAPORE
Jan. 28: Slope of Singapore dollar's appreciation band reduced in an unschedule move due to a lower inflation forecast.
SOUTH KOREA
Mar 11: base rate cut 25 bps to 1.75%, a surprise to most analysts, as economic growth and inflation will be below forecasts
SRI LANKA
Apr 15: main policy rates cut by 50 bps in surprise move, relaxed monetary policy stance will be pursued in coming months to boot growth while inflation remains in single digits
SWEDEN
Feb 12: repo rate cut 10 bps to -0.10%, starts quantitative easing by buying 10 bln Swedish crowsn of 1-5 yr gov. bonds to ensure inflation returns to target. Central bank says prepared to make policy more expansive
Mar 18: repo rate cut 15 bps to -0.25%, raises target for purchasing government bonds to 30 billion crowns in unscheduled move to ensure rise in crown doesn't reverse trend of rising inflation 
Apr 29: repo rate maintained at -0.25% but target for purchasing government bonds raised by 40-50 billion crowns to 80-90 billion to ensure deflation doesn't return and consumer prices continue to rise. Riksbank said prepared to make policy even more expansionary if necessary 
SWITZERLAND
Jan 15: Upper limit on Swiss franc exchange rate against euro of 1.20 abolished and 3-month Libor rate cut 50 bps to minus 0.75% in surprise move that shocks financial markets
THAILAND
Mar 11: policy rate cut 25 bps to 1.75% to support economic recovery and shore up confidence. Decision comes as a surprise to most economists as bank's MPC votes 4-3 to cut
Apr 29: policy rate cut 25 bps to 1.50% to support economic recovery and anchor inflation expectations
TRINIDAD & TOBAGO
Jan 30: repo rate raised 25 bps to 3.50% due to the potential for higher inflation, positive growth outlook and expected rise in U.S. rates
Mar 27: repo rate raised 25 bps to 3.75% due to the potential for higher inflation, positive growth outlook and expected rise in U.S. rates
TURKEY
Jan. 20: one-week repo rate cut 50 bps to 7.75% in response to lower inflation, future decisions conditional on improved inflation outlook
Feb 24: one-week repo rate cut 25 bps to 7.50%, with future decisions depending on inflation outlook
UGANDA
Apr 8: central bank rate raised by 100 bps to 12.00% to forestall rise in core inflation over bank's target
UKRAINE
Feb 5: discount rate raised 550 bps to 19.50% to defend hryvnia and curb inflation. Daily auctions for FX scrapped
Mar 3: discount rate raised 1050 bps to 30.00% to defend hryvnia exchange rate, reduce money market tensions and curb inflation 
UZBEKISTAN
Jan. 5: repo rate cut 100 bps to 9.00% to boost growth 



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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505016/hungary-cuts-rate-15-bps-cautious-easing-may-continue Tue, 26 May 2015 14:23:09 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505016/hungary-cuts-rate-15-bps-cautious-easing-may-continue <![CDATA[Hungary cuts rate 15 bps, cautious easing may continue]]>     Hungary's central bank cut its base rate by another 15 basis points to 1.65 percent and said the outlook for inflation points to "loose monetary conditions for an extended period" and it may continue with "cautious easing" as long as it helps it achieve its inflation target.
    The National Bank of Hungary (MNB) restarted its easing cycle in March after putting it on  hold in August 2014, has now cut its rate by 45 basis points this year. The rate cut was largely expected and economists first expect the central bank to put its easing cycle on hold when rates hit 1.5 percent.
    MNB said there is still a risk of second-round effects taking hold in the wake of falling inflation expectations and inflation is first expected to approach levels around its 3.0 percent target toward the end of the forecast period due to moderate inflation pressures and unused capacity in the economy that is likely to have a disinflationary impact.
    Hungary's consumer price inflation rate was minus 0.3 percent in April, up from minus 0.6 percent in March but still the eight consecutive month of deflation.
    The central bank said the pace of economic activity was strengthening, but output remains below potential and the domestic economy is still expected to have a disinflationary impact, albeit to a diminished extent as capacity utilization will only improve gradually due to the protracted recovery of Hungary's export markets.
    "Inflationary pressures are likely to remain moderate for an extended period," the MNB said.

    The National Bank of Hungary issued the following statement:


"At its meeting on 26 May 2015, the Monetary Council reviewed the latest economic and financial developments and voted to reduce the central bank base rate by 15 basis points from 1.80% to 1.65%, with effect from 27 May 2015.

In the Council’s judgement, Hungarian economic growth is likely to continue. While the pace of economic activity is strengthening, output remains below potential and the domestic real economy is expected to continue to have a disinflationary impact, albeit to a diminishing extent. Despite the pick-up in the components of domestic demand, capacity utilisation is expected to improve only gradually due to the protracted recovery in Hungary’s export markets. With employment rising, unemployment continues to exceed its long-term level determined by structural factors. Inflationary pressures are likely to remain moderate for an extended period.

Based on the inflation data for April, consumer prices show historically low dynamics; however, the rate of decline in prices slowed further. The April inflation data was slightly higher than both the projection in the March issue of the Inflation Report and market expectations; however, the Bank’s measures of underlying inflation capturing the short-term outlook still indicate moderate inflationary pressures in the economy, reflecting persistently low inflation in external markets, subdued imported inflation, the degree of unused capacity in the economy and the moderation in inflation expectations. Rises in fuel prices as well as in the price indices for market services and unprocessed food were the main factors contributing to the increase in inflation. Core inflation was up slightly compared to the previous month. With the pick-up in domestic demand and owing to the increase in wages, core inflation is likely to rise gradually; however, this process may slow due to the second-round effects of low commodity prices. Domestic real economic and labour market factors continue to have a disinflationary impact and low inflation is likely to persist for a sustained period. Overall, moderate underlying inflation developments continue to point in the direction of a low inflation environment, and therefore inflation is expected to approach levels around 3 per cent towards the end of the forecast period.

In the Council’s judgement, Hungarian economic growth is likely to continue at a rapid pace. Robust growth has been supported by both domestic and external demand. This is underpinned by the preliminary GDP data for the first quarter of 2015, which showed that the Hungarian economy continued to grow dynamically, mainly driven by the performance of industry and the expansion in retail sales. On the expenditure side, domestic demand growth may have continued. According to preliminary data, the trade surplus was higher in March than a year previously. The dynamics of retail sales have been stable and increased slightly in recent months, with the volume of sales increasing across a wide range of products. Rising household real income as a result of low inflation, the reduced need for deleveraging and increasing employment are expected to contribute to the increase in household consumption. Investment is expected to pick up gradually, owing to the recovery in activity, the Funding for Growth Scheme and its extension. Employment grew further in the first quarter as activity picked up.

International investor sentiment has been mostly unfavourable in the period since the Council’s latest interest rate decision. The downgrade of Greek government debt as well as tensions surrounding its financing and weak incoming macroeconomic data from the US negatively affected international investor sentiment. In addition, the reduction in risks associated with deflation in the euro-area economy may also have contributed to rises in long-term yields in developed and emerging markets. Accompanied by noticeable fluctuations, the forint depreciated against the euro, mainly driven by international factors. The domestic CDS spread has remained broadly unchanged, while long-term government bond yields have risen in line with rising euro area yields in the period since the latest policy decision. Hungary’s persistently high external financing capacity and the resulting decline in external debt have contributed to the reduction in its vulnerability. In the Council’s judgement, a cautious approach to monetary policy is warranted due to uncertainty in the global financial environment.

In the Council’s judgement, there is a degree of unused capacity in the economy and inflationary pressures are likely to remain moderate for a sustained period. The real economy is likely to have a disinflationary impact at the policy horizon and the negative output gap is expected to close only gradually.

Based on data becoming available previously, the risk of second-round effects taking hold in the wake of the change in inflation expectations still remains after increasing in recent months. In the Council’s judgement, if the assumptions underlying the Bank’s projections hold, the inflation outlook and the cyclical position of the economy point in the direction of a reduction in the policy rate and loose monetary conditions for an extended period. Cautious easing of the policy rate may continue as long as it supports the achievement of the medium-term inflation target.

The abridged minutes of today’s Council meeting will be published at 2 p.m. on 10 June 2015."





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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505010/kyrgyzstan-cuts-rate-150-bps-as-inflation-falls-som-rises Tue, 26 May 2015 14:03:06 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11505010/kyrgyzstan-cuts-rate-150-bps-as-inflation-falls-som-rises <![CDATA[Kyrgyzstan cuts rate 150 bps as inflation falls, som rises]]>      The central bank of the Kyrgyz Republic cut its policy rate by 150 basis points to 9.50 percent in light of a continuing decline in inflation and a slowdown in domestic and foreign demand.
     The National Bank of the Kyrgyz Republic began raising its rate in July 2014 to curb inflationary pressures from the depreciating som currency and the rate cut is the first move by the central bank to roll back rate cuts totaling 500 basis points from July through January. Since February the central bank had maintained the policy rate at 11.0 percent.
     Inflation in Kygyzstan, which borders Kazakhstan to the north and China to the east, eased to 7.9 percent in April and then to 6.4 percent by mid-May from 10.5 percent at the end of 2014, according to the central bank, which targets inflation of 5.0 to 7.0 percent inflation.
    The kyrgyzstani som began depreciating in August 2014 and hit a 2015-low of 63.9 to the U.S. dollar in early April but since then it has bounced back. Today it was quoted at 58.4 to the dollar, steady from 58.9 at the start of the year.
    The central bank said its economic growth was still subject to external factors, citing uncertainty among its main trade partners that is affecting it through trade and remittance channels.
    High economic growth of 7.0 percent from January through April was mainly driven by an expansion of gold mining at the Kumtor mine. Excluding Kumtor, Gross Domestic Product expanded by an annual 3.7 percent.

   
    The National Bank of the Kyrgyz Republic issued the following statement:

"On May 25, 2015 the Board of the National Bank of the Kyrgyz Republic decided to lower the monetary policy rate by 150 basis points, to 9.50 percent. 
Inflation rate has been declining. At the same time, the economic growth is still subjected to the influence of external factors.  
Economic situation in countries â€“ main trade partners remains uncertain and keeps influencing on economic slowdown in our country through foreign trade and remittances channels.  
As of the middle of May, the annual inflation has decreased to 6.4 percent, from 10.5 percent at the end of 2014. High economic growth rates in January-April of 2015 (7.0 percent) were mainly driven by the expansion of production at the “Kumtor” gold-mining company. Without “Kumtor”, the real GDP growth was 3.7 percent (in January-April of 2014 â€“ 4.2 percent).  
In view of foreign and domestic demand slowdown risks as well as of dynamics of inflationary developments, the National Bank of the Kyrgyz Republic shall continue to monitor the situation in country’s economy and take required monetary policy measures consistent with statutory mandate in order to stimulate economic growth. The monetary policy shall be aimed at achieving and maintaining inflation at the level of 5-7 percent in the medium term, which is determined by the Main directions of the monetary policy of the National Bank of the Kyrgyz Republic for a medium-term period. 
The next meeting of the Board of the National Bank of the Kyrgyz Republic on the monetary policy rate scheduled for June 29, 2015. "



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http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11504994/central-bank-news-link-list-may-26-2015-g7-finance-ministers-to-discuss-recent-forex-moves-canada Tue, 26 May 2015 04:53:05 +0100 http://www.hedgehogs.net/pg/blog/CentralBankNews/read/11504994/central-bank-news-link-list-may-26-2015-g7-finance-ministers-to-discuss-recent-forex-moves-canada <![CDATA[Central Bank News Link List - May 26, 2015: G7 finance ministers to discuss recent forex moves â Canada]]>
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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