Russia: retail sales, output slow
A string of bad economic data in Russia on Wednesday.
Retail sales in February posted their slowest growth rate in three years, rising just 2.5 per cent, compared with forecasts of around 3.3 per cent. Industrial output shrank 2 per cent year-on-year.
On balance, the numbers will increase the pressure for early rate cuts. But a cut still isn’t certain as the central bank is still worried about inflation: as was announced this month, inflation rose in February to 7.3 per cent. Continue reading »
S Korea flirts again with Tobin
James Tobin
South Korean government officials are flirting again with the idea of introducing taxes on financial transactions to curb rapid capital flows in and out of Asia’s fourth-largest economy.
Eun Sung-soo, director general at the finance ministry, told reporters on Wednesday that the government was considering “various” financial taxes to reduce volatility in capital flows and could strengthen existing capital control measures, if needed. Continue reading »
Nigeria: keeping money tight – for now
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 »
Russia: inflation fear delays rate cuts
Russia’s central bank left rates on hold at its monthly meeting on Friday – just as expected.
But, in a subtle change of tone in its statement, it dropped the references it has previously made to the economy running close to its potential, in a move which could signal future monetary easing. For some investors, cuts can’t come too soon. Continue reading »
Serbia: rates on hold, cuts in the offing
After eight rises in nine months, Serbia’s central bank has this week opted to keep interest rates on hold despite annual inflation in double digits.
The National Bank of Serbia (NBS) kept its repo rate at 11.75 per cent in the hope that consumer price inflation will moderate to within its 3.5-6.5 per cent target band by the end of the year even though it’s running at over 12 per cent. Fingers and toes crossed, then. Continue reading »
S Korea: no rate cut, for now
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 »
South Africa: weak retail sales could increase pressure for rate cut
South Africa’s retail sales slowed in January, according to data released on Wednesday, as consumers reacted to the growing gloom over the economy.
As the rand fell to a new four-year low against the dollar on Wednesday of 9.2, the South Africa Reserve Bank – due to hold its second policy meeting of the year next week – could face pressure for an interest rate cut. The reserve bank cut rates by 50 basis points last July at the height of the 2012 eurozone crisis. Continue reading »
Hungary: forint tumbles as Matolcsy and Orbán make their moves
The Hungarian forint plunged through the 300 per euro barrier on Monday as investors digested unexpectedly speedy moves by György Matolcsy, prime minister Viktor Orbán’s new man at the central bank, to impose his “non-traditional” brand of monetary policy.
Adding to the gloom was a warning that Orbán’s latest round of constitutional amendments, due to be voted on in parliament on Monday, may contravene European Union law. Continue reading »
[snap] Mexico cuts interest rates for first time since 2009
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.
Poland’s rate cut: a shocker
Central banks are rarely the kinds of places that get pulses racing but the rate setting committee at the National Bank of Poland has long been fairly unorthodox in its communication policy, which is why analysts were floored by a surprising decision to cut the benchmark rate by half a point Wednesday to a record low of 3.25 per cent. Continue reading »
[snap] Poland cuts as expected but by 50bp, not 25
Poland’s central bank cut rates for the fifth month in a row on Wednesday, taking the benchmark down 50 basis points to 3.25 per cent, its lowest level since 2000. Most analysts had expected a smaller cut, of 25 basis points. The zloty fell by 0.8 per cent against the euro on the news. Continue reading »
Matolcsy promises to behave
György Matolcsy, Hungary’s new central bank governor-designate, may have earned a reputation for innovation and unorthodoxy when minister of economy. But he insists he will be a veritable pillar of conservatism and reliability in his new job – and that’s what he told a parliamentary nomination hearing on Friday.
However, the 100m-forint question is, is this for real, or just a charade to calm the markets? Continue reading »
Hungary’s new central banker: it’s Matolcsy for “stability and predictability”
“So as widely expected Matolcsy moves from the Ministry of National Economy to replace Simor at the MNB, with Varga replacing him.”
That was how Peter Attard Montalto of Nomura put Friday’s news in his morning email.
Hungarians tended to be more terse. Continue reading »
Matolcsy: Hungary’s finance minister, conspiracy theorist, and central banker?
Hungary’s next central bank governor is expected to be named on Friday and György Matolcsy, finance minister, is the most hotly-tipped candidate. So Matolcsy’s weekly newspaper column on economics, society and culture attracted more than the usual amount of interest on Thursday when he used it to accuse foreign businesses and banks of orchestrating attacks on Hungary and to assert that a planned loan agreement with the IMF and EU would have destabilised the government and led Hungary into default. Continue reading »
Hungary: Simor’s last days
Hungary’s central bank is widely expected to cut its benchmark rate by 25 basis points to 5.25 per cent on Tuesday, at the last policy meeting before governor András Simor (pictured) steps down.
In a big week for the National Bank of Hungary, prime minister Viktor Orbán is due to name Simor’s successor on Friday, just three days before the new chief starts on Monday, March 4. Since Orban has made clear he wants a more relaxed monetary policy, he seems certain to pick a governor sympathetic to his views – possibly economy minister György Matolcsy. Continue reading »
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