Daily Archives: July 21, 2011

Claire Jones

Events in the eurozone and the US are at the forefront of central bankers’ thoughts, in some cases eclipsing domestic factors in setting policy rates.

So it proved in South Africa today, as the central bank opted to hold rates at a 30-year low of 5.5 per cent, as expected.

The South African Reserve Bank appeared unconcerned about striking fuel workers’ calls for a 13 per cent pay rise, or the recent spike in inflation to 5 per cent from 4.6 per cent in May, arguing that expectations remained well anchored within its 3-6 per cent target range. Instead, its policy statement focused on the global outlook. 

Robin Harding

I did a piece for today’s paper on what would happen if the debt ceiling was not raised on time. Here are a few extra points arising from the reporting for that piece:

(1) The Treasury becomes constrained by the debt ceiling at the point when its account with the Federal Reserve is forecast to be overdrawn at the end of the day. The August 2nd date cited by the Treasury is the last day that it expects to undertake normal operations and end below the limit. So the constraint would most likely bite, and the chaos start, on the 3rd

Claire Jones

This from the FT’s Joe Leahy and Samantha Pearson in São Paulo:

Brazil’s central bank has raised interest rates for the fifth time this year as the country battles inflation above official target levels.