The common theme from central banks was of slower global growth, but solid domestic demand in some countries is helping compensate for lower exports. This includes Canada, Peru, Malaysia, Thailand, Fiji and Mexico, which even raised the prospect of higher rates if inflation continues to rise.
Sweden surprised most economists by cutting its rate to prevent inflation falling further below the central bank’s target as exports and growth take a hit from Europe’s recession.
But the main event of last week was the European Central Bank’s ambitious plan to buy an unlimited amount of bonds from any euro zone member state that finds itself in serious financial trouble.
Like an adolescent that takes time to grow up, the ECB is gradually maturing into a fully-fledged central bank that will draw on all its resources to protect its family, the 17-nation euro zone.
LAST WEEK’S MONETARY POLICY DECISIONS:
NEXT WEEK:
| COUNTRY | NEW RATE | PREVIOUS RATE | RATE 1 YEAR AGO |
| AUSTRALIA | 3.50% | 3.50% | 4.75% |
| CANADA | 1.00% | 1.00% | 1.00% |
| POLAND | 4.75% | 4.75% | 4.75% |
| THAILAND | 3.00% | 3.00% | 3.50% |
| EURO ZONE | 0.75% | 0.75% | 1.50% |
| SWEDEN | 1.25% | 1.50% | 2.00% |
| UNITED KINGDOM | 0.50% | 0.50% | 0.50% |
| MALAYSIA | 3.00% | 3.00% | 3.00% |
| PERU | 4.25% | 4.25% | 4.25% |
| SERBIA | 10.50% | 10.50% | 11.25% |
| MEXICO | 4.50% | 4.50% | 4.50% |
| UGANDA | 15.00% | 17.00% | 16.00% |
| ZAMBIA | 9.00% | 9.00% | N/A |
| KENYA | 13.00% | 16.50% | 7.00% |
| FIJI | 0.50% | 0.50% | 1.50% |
| EGYPT | 9.25% | 9.25% | 8.25% |
| W. AFRICAN STATES | 4.00% | 4.00% | 4.25% |
NEXT WEEK:
The central bank calendar for next week calls for 8 central banks to decide monetary policy, with the global focus squarely on the Federal Reserve's two-day meeting that ends on Thursday. Expectations are growing that some form of stimulus will be announced following Friday's weak jobs report.
The other main event with a potential to
rock financial markets is a decision on Wednesday by Germany’s constitutional
court on the legality of the euro’s zone’s bailout funds. An unfavourable
decision would throw a wrench in policy-makers’ plan to forge a stronger
economic union.
The only central bank that may change
interest rates next week is South Korea, where growth is slowing and economists
would not be surprised if the Bank of Korea cuts rates again following July’s
surprise cut.
www.CentralBankNews.info
| COUNTRY | MEETING | CURRENT RATE | RATE 1 YEAR AGO |
| MOZAMBIQUE | 12-Sep | 11.50% | 16.00% |
| UNITED STATES | 13-Sep | 0.25% | 0.25% |
| NEW ZEALAND | 13-Sep | 2.50% | 2.50% |
| THE PHILIPPINES | 13-Sep | 3.75% | 4.50% |
| SWITZERLAND | 13-Sep | 0.25% | 0.25% |
| INDONESIA | 13-Sep | 5.75% | 6.75% |
| SOUTH KOREA | 13-Sep | 3.00% | 3.25% |
| CHILE | 13-Sep | 5.00% | 5.25% |
www.CentralBankNews.info
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