Rwanda holds rate, inflation seen at 2.5% in March 2015

    Rwanda's central bank maintained its key repo rate at 6.5 percent for the first quarter of 2015 to support the economy with its current accommodative policy stance.
    The National Bank of Rwanda (BNR), which cut its rate by 50 basis points this year,  said following the quarterly meetings of its Financial Stability Committee and its monetary policy committee that the financial sector remained sound with strong capital and solvency ratios and return on assets in the banking sector of 1.9 percent by end-September.
    Pressure on inflation was also contained in 2015 and headline inflation is not expected to exceed 2.0 percent by the end of December and be around 2.5 percent in March 2015.
    Rwanda's urban inflation, which the central bank tracks, in November was 0.7 percent in November, up from 0.2 percent in September due to the fall in oil prices and domestic food prices. Consumer price inflation, however, fell to minus 3.1 percent in November from minus 2.1 percent in October.
    The bank said pressures to the outlook for inflation could come from uncertain international commodity prices and the exchange rate.
    "However, these risks are not expected to drive inflation on the extreme upside," the bank said.

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Central Bank News Link List - Dec 30, 2014 - Fed can limit spillovers by avoiding asset sales, IMF paper says

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

• Fed can limit spillovers by avoiding asset sales, IMF paper says (Bloomberg)
• European Central Bank to face major changes in 2015 (AFP)
• Ukraine in ‘full-blown financial crises – National Bank head (RT)
• India finance minister denies pressuring central bank to cut rates (Reuters)
• Emerging market bond issuance hits record high in 2014 (Reuters)
• China could cut interest rates in 2015 to stimulate growth (Want China Times)
• Mauritian prime minister names Roi as central bank governor (Bloomberg)
• Thai economy continues slow recovery in November, central bank says (Dow Jones)
• Brazil to miss 2014 fiscal targets: central bank (AFP)
• Demographics needn’t mean deflation, argues former BOJ official (WSJ)
• China’s news bank rules explained (Caixin Online)
• Korea’s current account surplus set to top BOK forecast (Bloomberg)
• Azerbaijan cenbank: reduction of interest rates will continue in 2015 (APA)
• Sri Lankan cenbank 2015 roadmap Friday with political agenda (Times) 

         www.CentralBankNews.info

Central Bank News Link List - Dec 29, 2014 - Greek vote puts ECB funds at risk as crises memories revived

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

• Greek vote puts ECB funds at risk as crises memories revived (Bloomberg)
• German central bank chief: cheap oil is stimulus (AP)
• Chile December rate hold decision unanimous - minutes (Reuters)
• Exclusive: Japan’s regional banks face stress test for ultra-low rates (Reuters)
• Mauritius seen favoring ex-central bank head to reoccupy post (Bloomberg)
• Mauritius Governor Bheenick , second dep. governor terminated (Bank of Mauritius)
• German central bank starts to bring some of its gold back home (DPA)
• Russian bank CEO says central bank’s key rate overpriced (Tass)
• Lukashenko names new PM, central bank head (AP)
• RBI’s Rajan sees high possibility of returning to strong growth in 2 years (RTT)
• Mervyn King: reacting to financial crash was ‘exciting’ (Press Association)
• BOE begins monitoring internet, networks for unconventional data (IBT)
• Belarus cuts duty on FX purchases to 20 pct (Reuters)
• Fed should raise rates now: John Taylor (CNBC)
• Philippine banks start tracking BSP policy moves (Business World) 

          www.CentralBankNews.info

Israel holds rate, revises up inflation, growth forecasts

    Israel's central bank maintained its benchmark interest rate at 0.25 percent, saying the current rate supports the economic recovery and the return of inflation to the target range.
    The guidance by the Bank of Israel (BOI), which cut its rate by 75 basis points in 2014, compares with its November guidance when its said the recent rate cuts had yet to be fully reflected in activity and inflation.
    Israel's economy, which was hit by the military offensive into Gaza in July, has started to recover with economic activity expected to return to the path of growth from before operation "Protective Edge," which BOI staff estimate detracted about 0.3 percent from annual Gross Domestic Product due to the negative impact on tourism and private consumption.
    For 2014 the BOI forecast GDP growth of 2.5 percent, slightly up from its September forecast of 2.3 percent due to an upward revision of first half GDP data. In the third quarter of 2014 Israel's GDP shrank by 0.09 percent from the second quarter for annual growth of 1.89 percent, down from the second quarter growth rate of 2.79 percent.
    For 2015 the BOI forecasts growth of 3.2 percent, up from September's forecast of 3.0 pct, due to an improvement in global trade, the depreciation of the shekel currency in the second half of this year and a recovery in tourism. The sharp decline in oil prices is expected to support private consumption.
    BOI staff also revised upwards its forecast for inflation in 2015 to 1.1 percent from the September forecast of 1.0 percent. Excluding the effect of a cut in electricity and water prices in January, inflation is seen at 1.5 percent.

This week in monetary policy: Israel

    This week (December 29, 2014 - January 2, 2015) only the Bank of Israel is scheduled to decide on monetary policy.

    Following table includes the name of the country, its MSCI classification, the date the policy decision will be announced, the current policy rate, and the rate one year ago.

COUNTRY MSCI              DATE  CURRENT  RATE         1 YEAR AGO ISRAEL DM 29-Dec 0.25% 1.00%

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Central Bank News Link List - Dec 26, 2014 - Russia sees economic slump as bailed-out bank gets more funds

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

• Russia forecasts economic slump as bailed-out bank gets more funds (Reuters)
• Bank of Israel seen holding rates again on weaker shekel (Reuters)
• World economy 2014: The year monetary stimulus proved its worth (Straits Times)
• China to ease rules to boost lending (Dow Jones)
• US Fed buys $6 bln of mortgage  bonds, sells none (Reuters)
• BOJ’s Kuroda says Japan benefits greatly from oil price fall (Reuters)
• BOJ policymakers call for fiscal reform amid tax hike delay-minutes (Reuters)
• Key issues the FOMC might face in 2015 (Confluence Investment Management)
• Australia interest rates unlikely to fall further in 2015 (Sydney Morning Herald)
• S.Korea c.bank promises policy to stay loose as sentiment weakens (Reuters)
• Thai central bank lowers 2014 growth projection to 0.8 pct (Xinhua)
• UK rates will double by end of 2015, Treasury survey says (The Telegraph)
• RBI can’t flip-flop on interest rate: Raghuram Rajan (PTI)
• RBI likely to cut rates by 0.25% in February’s monetary policy review (PTI)
• BSP likely to increase interest rates by 50 points, says UBS (Manila Standard)
• Japan proposes basing interbank rates on actual trades (Reuters)
• Azerbaijan central bank to cut interest rates on loans (AzerNews)
• UAE central bank to study margin lending (Khaleej Times)
• The Fed’s needless flirtation with danger (M.Feldstein/WSJ)

           www.CentralBankNews.info

Turkey holds rates, tight stance until inflation drops

    Turkey's central bank maintained its short-term interest rates, including the benchmark repo rate at 8.25 percent, as expected, and confirmed its guidance that the "tight monetary policy stance will be maintained, by keeping a flat yield curve, until there is a significant improvement in the inflation outlook."
    The Central Bank of the Republic of Turkey (CBRT), which raised its repo rate by 550 basis points in January and then cut it by 175 points from May through July, added that it expects inflation to decline in 2015, and at a faster pace in the first half of next year, as forecast in its Inflation Report.
    In its latest inflation report from Oct. 31, the CBRT forecasts inflation in 2015 to decline to a mid-point of 6.1 percent - within a range of 4.6 and 7.6 percent - before stabilizing around 5 percent in the medium term.
    But the decline in oil prices is likely to push down inflation further in 2015 to around 5 percent, the central bank governor, Erdem Basci, said this month. The CBRT targets inflation of 5.0 percent.
    Turkey's consumer price inflation rate rose to 9.15 percent in November from 8.96 percent in October while the core inflation rate eased to 9.0 percent from 9.1 percent.
    The central bank has been under political pressure to cut its rates and while the drop in oil, and thus inflation, could led to rate cuts, the decline in the Turkish lira currency against the U.S. dollar - along with most other emerging markets - is making import prices more expensive.
    The lira has been depreciating fast in the last month and was trading at 2.32 to the dollar today, down 7.33 percent since the start of the year.

Central Bank News Link List - Dec 23, 2014 - Russia moves to stave off panic after rescuing bank

Here's today's Central Bank News' link list, click through if you missed the previous link list. The list comprises news about central banks that is not covered by Central Bank News. The list is updated during the day with the latest developments so readers don't miss any important news.

• Russia moves to stave off panic among depositors after rescuing bank (Bloomberg)
• Brazil central bank signals another steep interest rate hike (Reuters)
• Turkish CB to leave interest rate at 8.25%: survey (Anadolu)
• ECB Hansson: Sov bond purchases would be ‘borderline’ – press (MNI)
• Not quite checkmate for the Bundesbank (WSJ)
• PBOC uses hidden hand as China seeks to stem slowdown (Bloomberg)
• Abe expected to tip BOJ board closer to his views in 2015 (Reuters)
• ECB vice-president expects negative inflation in coming months (Reuters)
• Yellen’s first year at Fed: A remarkably steady course (NYT)
• The Fed sets another trap (S. Roach/Project Syndicate)
• Bank of Canada likely to hike interest rate in 2015, experts say (Canadian Press)
• RBA frustrated as weaker Aussie goal thwarted (Bloomberg)
• Russia growls across the border as Lithuania readies for euro (Reuters)
• Hungarian deflation seen prevailing over forint on rates (Bloomberg)
• Malaysia policy rate to remain unchanged at 3.25 pct in 2015 (Bernama)
• Central African cenbank cuts 2014 growth forecast to 4.9 pct (Reuters)
• Iranian administration plans to reduce bank interest rates (Trend)
• Belarus is taking extreme measures to stop a currency panic (AFP)
• Taiwan dollar slumps to four-year low on Fed interest-rate bets (Bloomberg)
• Vietnam’s credit growth seen at 13 pct y/y in 2014-c.bank (Reuters) 

         www.CentralBankNews.info