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Central Bank News Link List - 14 March 2012

March 14, 2012 by CentralBankNews   Comments (0)

Here's today's Central Bank News link list, click through if you missed the previous link list.  Remember, if you want to submit links for inclusion in the daily central banking news link list, just email them through to us or post them in the comments section below.


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Central Bank of Sri Lanka Holds Repo Rate at 7.50%

March 14, 2012 by CentralBankNews   Comments (0)

The Central Bank of Sri Lanka held its benchmark repurchase rate unchanged at 7.50%, and reverse repurchase rate at 9.00%, and kept the Statutory Reserve Ratio at 8%.  The Bank said: "recent policy measures are expected to lead to a moderation of aggregate demand which will have a dampening effect on prices, thereby offsetting to some extent, the supply side pressures on prices as a result of the recent upward adjustments to administered prices. As a consequence, the Central Bank expects inflation in 2012 to remain subdued at mid-single digit levels. The Central Bank also expects the recent policy measures to decelerate broad money growth during the course of 2012 towards the targeted levels, thereby further easing future inflationary pressures."

Sri Lanka's central bank previously hiked rates by 50 basis points at its February meeting this year, meanwhile the Bank last cut its key interest rates in January last year.  Sri Lanka reported an annual headline inflation rate of 3.8% in January, 4.9% in December, and 4.7% in November, down from 6.4% in September, 7% in August, 7.5% in July, 7.1% in June, and 8.2% in May.  

Sri Lanka had targeted 8.5% GDP growth in 2011, after its economy expanded 8% in 2010.  Sri Lanka reported 8.2% annual GDP growth in the second quarter (7.9% in Q1).  The Sri Lankan Rupee (LKR) last traded around 124 against the US dollar. 

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HKMA Follows Fed, Holds Rate at 0.50%

March 14, 2012 by CentralBankNews   Comments (0)

The Hong Kong Monetary Authority held its base rate unchanged at 0.50% following the decision of the US Federal Reserve to leave the fed funds rate unchanged at 0-0.25% until late 2014. The HKMA also previously held its base interest rate unchanged at 0.50%, after the FOMC met in January.  The Hong Kong Monetary Authority generally tends to follow the monetary policy decisions of the US Federal Reserve's Federal Open Market Committee as the Hong Kong Dollar is fixed against the United States Dollar. 


Hong Kong reported consumer price inflation of 5.7% in December, 5.8% in October and September, compared to 5.7% in August, 7.9% in July, 5.6% in June, 5.2% in May and 4.6% in April this year.  Hong Kong's economy expanded 0.1% in Q3 this year, (-0.4% in Q2, 2.8% in Q1), placing year on year GDP growth at 4.3% (5% in Q2, 7.5% in Q1).  

The Hong Kong dollar is fixed against the U.S. currency at an exchange rate of between HK$7.75 and HK$7.85 per dollar; the USDHKD exchange rate last traded at 7.762.  The Hang Seng is down -8.6% over the past year, and last traded around 21,315.

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US FOMC Holds Monetary Policy Settings Unchanged

March 14, 2012 by CentralBankNews   Comments (0)

The US Federal Open Market Committee (FOMC) kept the fed funds rate steady at 0 to 0.25 percent and made no changes to its balance sheet management and quantitative easing programs. The Fed said: "To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."

The Fed previously held policy settings unchanged also, while its last move was the announcement of the commencement of "operation twist" at its September meeting (and maintained that program, and the policy of reinvesting during today's meeting), after it held monetary policy settings unchanged at its August meeting, where it previously committed to low rates until 2013.  The US reported inflation of 3% in December, down from 3.9% in September, compared to 3.8% in August, and 3.6% in both July, June and May, up from 3.2% in April.  Meanwhile the US economy grew 1.8% in Q3, up from 1.3% in Q2, and 0.4% in Q1 this year.  

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So let me get this straight....equities are going to rally even though........ http://bit.ly/xQe6uh

March 13, 2012 by themacromindseye   Comments (0)

Most of my regular readers will have noticed my somewhat bullish disposition over the past few months. But today's post FOMC topside breakout in equities has been a little perplexing to me. Along those lines I'd like to see if I can't a few things straight........

read more...

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Central Bank of Russia Holds Refi Rate at 8.00%

March 13, 2012 by CentralBankNews   Comments (0)

The Central Bank of Russia kept its benchmark refinancing rate steady at 8.00%.  The Bank said: "The dynamics of the main macroeconomic indicators in January showed that the rates of growth in consumption were still higher than in production. Real wage growth rate remained high, partly due to its dynamics in the public sector of economy, while the rate of unemployment remained rather low. The consumer credit activity also stays robust. At the same time production growth rates remained moderate and economic confidence indicators kept rather weak in the recent months. Considering recent domestic and international macroeconomic developments the Bank of Russia judged that the current level of money market interest rates within the interest rate corridor was appropriate in the coming months."

The Russian central bank previously cut the refi rate 25bps at its December meeting, while it last raised the fixed overnight deposit rate by 25bps to 3.50% in May, and the benchmark refinancing rate by 25 basis points to 8.25% in April this year.  Russia reported annual inflation of 4.1% in January, down from 6.8% in November, 7.2% in September and October, down from 8.2% in August, 9% in July, and 9.4% in June, meanwhile Bank Chairman Sergey Ignatiev is trying to keep inflation between 6% and 7%.  


Russian economic growth was recorded at 5.2% y/y in Q3 this year, compared to 3.4% in Q2, 4.1% in Q1, and 4.5% in the December quarter of 2010; the IMF is expecting 4.5% growth for the full year.  The Russian Ruble (RUB) has weakened about 4% against the US dollar over the past year, while the USDRUB exchange rate last traded around 29.41.  The Bank plans to meet again in early April.

www.CentralBankNews.info

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Bank of Japan Announces 2 trillion yen Enhancement to Loan Program

March 13, 2012 by CentralBankNews   Comments (0)

The Bank of Japan held its interest rate at 0-0.10% and announced 2 trillion yen of enhancements to "the Growth-Supporting Funding Facility" (GSFF) resulting in the GSFF expanding to 5.5 trillion yen. At the Bank of Japan's regular meeting, board member Mr. R. Miyao proposed to increase the amount of the Asset Purchase Program by about 5 trillion yen, but the proposal was defeated by a majority vote. The Bank noted it will continue with "powerful easing" until it judges its new 1 percent inflation goal to be in sight.


The Bank said: "Japan's economy currently confronts the long-term structural challenge of declining trend growth rates amid rapid population aging.  Tackling this challenge is crucial for establishing a new basis for economic growth.  The goal of overcoming deflation will be achieved through such efforts to strengthen growth potential and via support from the financial side.  With this in mind, it is important for business firms, financial institutions, the government, and the central bank each to continue exerting themselves in their respective roles."
The Bank of Japan added another 10 trillion yen to its 65 trillion yen quantitative easing program last month, after it expanded its asset purchase program in October by another 5 trillion yen to 55 trillion yen, and previously announced additions to its quantitative easing program during its August meeting.  The Bank had previously changed its asset purchase program in March last year, when it added a further 5 trillion yen to its target. 

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Bank of Mozambique Cuts Rate 125bps to 13.75%

March 13, 2012 by CentralBankNews   Comments (0)

The Bank of Mozambique dropped its standing facility lending interest rate 125 basis points to 13.75% from 15.00%.  The Bank said [translated]: "The Monetary Policy Committee noted the results of inflation, which are favorable, and analyzed the predictions of short and medium term for this indicator, as well as the environment of stability that the financial sector observed and considered to have conditions for enlargement of the space money in order to facilitate bank financing to the private sector of the economy, contributing to the GDP growth targets set for this year, against a backdrop of low inflation and controlled."

Previously the Bank held rates unchanged, after it cut the interest rate 25 basis points, and RRR by 25 basis points at its December meeting, and last cut the key lending rate by 50bps to 16.00% at its August meeting, after raising the rate by 100 basis points to 16.5% at its January meeting last year, where it also raised the interest rate paid on deposits by 100 basis points to 5%, and lifted the required reserve rate by 25 basis points to 9%.  

Mozambique saw inflation in it's largest city, Maputo, of 7.7% in November, down from 8.3% in October, 7.8% in September, 7.9% in August, 7.7% in July, and lower than 9.3% in June.  Mozambique's economy expanded 6.7% in the September quarter, compared to 6.8% in the June quarter and 8.1% in the March quarter.


Mozambique's currency, the Metical (MZN) last traded around 27.40 against the US dollar.  The Bank of Mozambique next meets on the 11th of April this year.

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