Friday, February 24, 2012

Monetary Policy Week in Review - 25 February 2012

The past week in monetary policy saw two central banks changing their main interest rates; Colombia +25bps to 5.25%, and Belarus -500bps to 38.00%, while two held their rates unchanged; Namibia at 6.00%, and Turkey at 5.75%.  Turkey did however cut some of its other interest rates (see the update for details).  Also making headlines was the People's Bank of China announcing a 50 basis point cut to the Required Reserve Ratio, an important move towards more growth focused policy settings.

Looking at the central bank calendar, the week ahead features a handful of emerging/frontier market central bank meetings; with decisions due from Israel, Hungary, and the Philippines. The main event of the next week in central banking though will be the European Central Bank's second LTRO. Also of note is US Federal Reserve Chairman, Ben Bernanke, testifying before the House and Senate on Thursday and Friday.
  • ILS - Israel (Bank of Israel) expected to hold at 2.75%% on the 27th of Feb
  • HUF - Hungary (Magyar Nemzeti Bank)  expected to hold at 7.00% on the 28th of Feb
  • PHP - Philippines (Bangko Sentral ng Pilipinas) expected to hold at 4.25%% on the 1st of March

Also during the past week Central Bank News released data, extending back to January 2000, for the Global Monetary Policy Rate Index - Emerging Markets.

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5 comments:

  1. AnonymousFebruary 24, 2012 at 1:43 PM

    Hmm, the ECB's next LTRO will be interesting... could be make or break for markets

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    1. AnonymousFebruary 25, 2012 at 2:46 AM

      apparently market is picking headline figure of somewhere between 300 and 600 billion, maybe net liquidity of up-to 200B? Good ole backdoor quantitative easing, get more money in the system so at least risk assets can chalk up some gains (while the economic recovery splutters and coughs)

      Delete
    2. Econ GrapherFebruary 25, 2012 at 12:22 PM

      It will be interesting to see the take-up on the alternative collateral side of things too; the theory is that smaller banks will be able to use this and therefore will be better positioned to keep lending to SME's

      Delete
  2. AnonymousFebruary 24, 2012 at 3:03 PM

    The only matter I note here is that Belarus has a very high interest rate. Perhaps the highest in the world.

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    Replies
    1. centralbanknews.infoFebruary 24, 2012 at 7:01 PM

      You're quite right, Belarus has been battling hyperinflation, but even with interest rates around 40%, it has seen inflation of 100%, so in real terms (inflation adjusting) the effective interest rate is close to negative 60%

      Delete

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