Poland’s slowing economy prompted the central bank’s Monetary Policy Council to cut rates by a quarter point to a record low of 3 per cent on Wednesday, surprising a majority of analysts who had expected the council to stay put after a recent easing cycle that had seen the bank’s benchmark rate come down from 4.75 per cent near the end of last year. Continue reading »
Brazil’s central bank is in tightening mode again, raising its policy interest rate last week after a long cycle of loosening that began in August 2011. It is worried that inflation is on the rise and less worried, apparently, about slow growth.
But behind recent numbers on inflation is another set of numbers on retail sales, which fell in February for the first time in a decade. If that turns into a trend, the very foundations of Brazil’s recent growth story will be undermined. Chart of the week takes a look. Continue reading »
Turkey’s central bank cut interest rates by more than expected on Tuesday – a move that highlighted pressures from both far afield and closer to home.
In some ways, the further-flung-factor was the more straightfoward one: the inflationary stance of Japan’s new prime minister is having a significant impact on Turkish monetary policy. What is more controversial is the role of Turkey’s own premier. Continue reading »
It was slightly better than expected. But not by enough. The latest measure of Brazil’s troubled economy will have left policy makers in a quandry.
The central bank’s monthly activity index contracted by 0.52 per cent in February, dashing any hopes that its 1.4 per cent expansion in January was the start of a sustained recovery. It comes after figures this week showed inflation rising above the government’s tolerated maximum – figures that might have strengthened the resolve of any hawks at the central bank keen to raise interest rates at its policy meeting next week. That now looks a harder trick to pull off. Continue reading »
Despite a deteriorating current account, downward pressure on the rupiah and an upward tick in inflation, Indonesia’s central bank decided to keep its benchmark interest rate on hold at a historic low of 5.75 per cent on Thursday.
While some economists, led by the bears at Credit Suisse, have warned that southeast Asia’s biggest economy is showing signs of overheating, Bank Indonesia seems more interested in stoking growth. Continue reading »
Poland kept interest rates steady at 3.25 per cent on Wednesday, as expected by analysts. And few expect the central bank to do anything other than hold for the rest of the year – assuming an economic recovery.
But the language of the bank is worth examining. Is that a hint of a further cut we hear? Continue reading »
Hungary’s new central bank governor, the dovish György Matolcsy, has cut rates by 25 basis points to an all-time low of 5 per cent – a pretty orthodox move. Hungary’s currency is one of emerging markets worst performers as markets have been concerned that prime minister Victor Orbán’s unorthodox economic approach would spread to the central bank.
Neil Buckley, the FT’s eastern Europe editor, discusses with emerging markets editor, Stefan Wagstyl whether this cautious cut will help the forint. Continue reading »
It has been a tumultuous few days for shares in National Bank of Kenya, the country’s ninth biggest lender by market capitalisation. A lack of the price-setting power enjoyed by bigger banks meant it first spooked investors with a profit warning last week – and then sent them scurrying on Monday when it reported a 52.8 per cent fall in pretax profits for 2012. Continue reading »
Turkey’s central bank cut its overnight lending rate by 1 percentage point on Tuesday to 7.5 per cent but kept its overnight borrowing rate and its repurchasing rate – its main policy rate – on hold at 4.5 per cent and 5.5 per cent, respectively.
It is a typical example of what the bank calls its ‘flexible’ monetary policy, designed to adapt to uncertainties in the global economy. Analysts mostly call it ‘confusing’. Continue reading »
By Nguyen Phuong Linh and Jake Maxwell Watts
It was almost inevitable that Vietnam’s central bank would cut interest rates for the seventh time in a row on Monday. What is much less certain is whether the move will succeed in boosting the country’s struggling economy, with commercial banks reluctant to pass on lower interest rates to cash-strapped businesses. Continue reading »
Colombia sure likes to keep the markets on their toes.
On Friday, the country cut its benchmark interest rate for the fifth consecutive month. While previous cuts came in at 25bps increments, the central bank took out the axe this time around and chop rates by 50bps to 3.25 per cent – the lowest in Latin America. Continue reading »
The Central Bank of Egypt raised its main interest rates for the first time since November 2011, prompted by the jump in February headline inflation and despite the slowdown in economic growth.
The bank raised the overnight deposit rate and overnight lending rate by 50 basis points to 9.75 per cent and 10.75 per cent, respectively, and raised its discount rate by 75bp to 10.25 per cent. Continue reading »
A more hawkish tone from the Central Bank of Nigeria than many economists expected, but no change in the benchmark interest rate – yet.
The CBN on Tuesday held the benchmark at 12 per cent, in line with governor Lamido Sanusi’s earlier statement that his monetary policy committee would probably hold rates so as not to compromise the bank’s successes in fighting inflation. Continue reading »
Not this time – maybe next. The Bank of Korea on Thursday left interest rates unchanged at 2.75 per cent for a fifth consecutive month, despite slowing economic growth and low inflation. Continue reading »
Mexico’s central bank has cut its policy interest rate by 50 basis points to an all-time low of 4 per cent a year, marking a change in monetary policy for the first time in four years.
Most analysts had expected the hyper-conservative bank to stick to its policy of no change, with the economy growing at about 4 per cent a year and inflation still above the government’s target. But the bank is apparently more concerned about the growth outlook than it is about inflation.