Daily Archives: April 4, 2011

The State Bank of Vietnam has raised two key rates by a full percentage point – a significant increase but still a slower pace than very large rate raises in February and March. The most recent move affects the refinancing and repurchase rates, taking both to 13 per cent.

The move comes less than a month after a five percentage point increase in the discount rate. In February, when the central bank added to inflationary pressure with a 9.3 per cent devaluation of the dong. Since then, the central bank has raised the refinancing rate by 2 percentage points and raised the reverse repo rate by a percentage point. Read more

The Mafia and the fiscal multiplier – VoxEU

Now for an Arab economic revolution – Project Syndicate Read more

Increasingly hawkish statements from Poland’s interest rate-setting Monetary Policy Council have analysts convinced that Poland is in for another rate hike on Tuesday as the central bank resumes its tightening policy.

The expectation is that the council will increase its policy rate by a quarter point to 4 per cent a year – with analysts at Danske Bank predicting that rates will continue their upward climb, hitting 5 per cent within 12 months.

Inflation expectations are on the rise. According to Citi Handlowy bank, they reached 3.9 per cent a year in March. The central bank has also expressed concern about the lacklustre performance of the zloty, which has been sagging on worries over Poland’s budget and the government’s unenthusiastic fiscal tightening programme.

 Read more

Plans by the ECB to tighten monetary policy before the US Federal Reserve and Bank of England were criticised at the weekend as premature and potentially dangerous by economists.

But in a Financial Times video interview, Gerard Lyons, Standard Chartered’s chief economist, warned: “The challenge in Europe is that ‘one size’ does not fit all.” Higher official borrowing costs would be “the wrong policy, for the wrong reason at the wrong time”, he said. Read more