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South African Reserve Bank Holds Repo Rate at 5.50%

January 20, 2012 by CentralBankNews   Comments (0)

The South African Reserve Bank [SARB] held its monetary policy interest rate, the repo rate, unchanged at 5.50%.  The Bank said: "The MPC remains of the view that inflation pressures are primarily of a cost-push nature, but is concerned that a persistent upward trend in inflation and prolonged breach of the inflation target could have an adverse effect on inflation expectations which could reinforce the upward inflation dynamics. However, the MPC is also cognisant of the slowing domestic economy and feels that given the lack of demand pressures, monetary tightening at this stage would not be appropriate. At the same time, the nominal policy rate is at a long term low and the real policy rate is slightly negative, indicating a monetary policy stance that is accommodative and supportive of the real economy."

Previously the SARB also held the repo rate unchanged at its November meeting last year, the Bank last cut the repo rate by 50bps to 5.50% in November 2010.  South Africa reported annual inflation of 6.1% in December, compared to 5.7% in September, 5.3% in August and July, 5% in June, 4.6% in May, and 4.2% in April this year, compared to its official inflation target range of 3-6%. 


South Africa's economy grew 1.3% in the June quarter, and 1.4% in the September quarter of 2011.  Meanwhile the South African Rand (ZAR) has weakened by about 12% against the US dollar over the past year, with the USDZAR 
exchange rate last trading around 7.93

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Latvia Central Bank Holds Rate 3.50%, Cuts Reserve Ratio

January 20, 2012 by CentralBankNews   Comments (0)

Latvijas Banka kept its main monetary policy interest rate, the refinancing rate, steady at 3.50%, and held its other interest rates unchanged, but reduced the reserve ratio for bank liabilities above two years to 2% from 3%, and for other liabilities to 4% from 5%.  The Bank said: "By reducing the reserve ratio, additional financial resources are released for lending and more beneficial conditions for the availability of lending resources necessary for economic growth are created. A simultaneous reduction of the reserve requirement for liabilities of different maturities will promote a balanced impact on the availability of financing in the banking sector and will continue to maintain banks' motivation in attracting long-term financing."

Previously the Bank also kept monetary policy settings unchanged, leaving the refinancing rate at 3.50% at its November meeting.  The Bank of Latvia last reduced the refinancing rate by 50bps to 3.50% in March 2010.  Latvia reported annual inflation of 4% in December, down from 4.4% in October, 4.6% in September, and 4.7% in August.  The Latvian economy expanded 5.6% on an annual basis in Q2, while GDP growth was reported as 3.5% in the previous quarter.  The Latvian currency, the lat (LVL), last traded around 0.54 against the US dollar.

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Amartya Sen: thoughts on poverty and the global financial crisis

January 20, 2012 by skinnercm   Comments (0)

I attended an interesting lecture last night from an economic legend: Professor Amartya Sen of Harvard University.

read more...

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