Month: July 2013

Free Markets …………… Freedom first

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Free Markets ............... Freedom first

Free Markets …………… Freedom first by Milton Friedman

Bull Market Clock

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Bull Market Clock

Bull to bear market clock

Peru Central Bank holds rate, makes reserve requirements more flexible

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Peru’s central bank maintained its policy rate at 4.25 percent as inflation remains within the bank’s target range and economic growth is close to the “economy’s potential level of growth amid international financial uncertainty.”
The Central Bank of Peru (BCRP), which has held rates steady since April 2011, also made its reserve requirements regime more flexible and said that “if necessary, the Board will adopt additional measures to make the regime of requirement reserves more flexible in order to promote a more orderly evolution of credit.”
Under the new measures, the central bank said that a financial institution’s long-term liabilities that are “not subject to reserve requirements was raised in May to 2.3 times the effective equity with the aim of promoting increased long-term financing in soles, and a maximum limit of 20 percent was established in June for the mean rate of reserve requirements in soles in order to reduce the dispersion of required reserves in the different financial entities and promote intermediation in soles, releasing in this way 500 million soles.”
Peru’s economy has been weakening in recent months due to weaker mining and last month the central bank lowered its 2013 growth forecast to 6.1 percent from a previous forecast of 6.3 percent. In 2012 the economy expanded by 6.3 percent.
In the first quarter, Peru’s Gross Domestic Product grew by 2.1 percent from the previous quarter for annual growth of 4.8 percent, down from 5.9 percent in the fourth quarter.
“Current and advanced indicators of activity show that the growth of the Peruvian economy is
close to its long-term sustainable level of growth, even though the indicators associated with
the external market still show a weak performance that affects the prices and volumes of
export products,” the central bank said.
Inflation in Peru rose to 2.77 percent in June from 2.47 percent in May due to higher prices of some foods and fuels.
The central bank, which targets inflation of 1.0 to 2.0 percent, said it expects headline inflation to converge to the center of its target range in the next months due to better food supply, economic growth close to the economy’s potential and to inflation expectations that are anchored to the bank’s target range.

for more details log on to Central Bank of Peru website : http://www.bcrp.gob.pe/home.html

Serbia leaves rate on hold as inflation continues to fall – Central Bank News

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Serbia’s central bank left its key policy rate steady at 11.0 percent, saying inflation continues to decline due to lower demand and repeated that it should return to the central bank’s target range by October.
The National Bank of Serbia (NBS), which embarked on a monetary tightening campaign last year to hold down inflation before cutting rates by a total of 75 basis points in May and June, said a good agricultural season and global market prices should lower domestic food prices and a deceleration in credit activity and lower growth in wages “confirm that low aggregate demand will continue to be the key disinflationary factor in the period ahead.”
Serbia’s inflation rate eased to 9.9 percent in May from 11.4 percent the previous month, continuing the decline since hitting a recent high of 12.9 percent in October last year. The central bank targets inflation of 4.0 percent, plus/minus 1.5 percentage points.
Like other emerging markets, Serbia’s markets have been hit by an outflow of funds from the Federal Reserve’s plan to taper quantitative easing later this year, and the central bank last month intervened in foreign exchange markets several times to slow the decline in the dinar.

From the beginning of May through July 9, the dinar has depreciated just over 3 percent against the euro, quoted at 114 to the euro earlier today.
“Unfavourable movements in international financial markets have led to higher investor risk aversion, which has sparked an increase in risk premia and depreciation pressures almost throughout the region,” the central bank said.
The central bank again appealed to the government to reduce its deficit further. Last month the government said it would cut spending to reduce this year’s deficit to 4.6 percent of Gross Domestic Product after the International Monetary Fund warned is could reach 8 percent.
“The Executive Board holds that the effects of additional fiscal consolidation measures and the implementation of structural reforms will contribute to further subsiding of inflationary pressures and aggregate demand and will help increase investor interest in the Serbian economy.”

Serbia leaves rate on hold as inflation continues to fall – Central Bank News

For more details log on to National Bank of Serbia website : http://www.nbs.rs/internet/english/

Malaysia Central Bank holds rate . . .

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Malaysia’s central bank held its overnight policy rate (OPR) steady at 3.0 percent, as expected, but said the weak global economy may impact the country’s economic growth though domestic demand continues to support growth.
The Central Bank of Malaysia, which has held rates steady since June 2011, said domestic demand in emerging economies remains a important source of growth for the global economy but the prolonged weakness in the “external environment has begun to affect domestic economic activity in these economies.”
“For the Malaysian economy, domestic demand has continued to support growth amid the continued moderation in external demand. The sustained weakness in the external sector may, however, affect the overall growth momentum,” the central bank, known as Bank Negara Malaysia, cautioned.
Malaysia’s Gross Domestic Product contracted by 4.9 percent in the first quarter from the previous quarter for annual growth of 4.1 percent, down from 6.5 percent. The bank has forecast growth of 5-6 percent this year compared with 5.6 percent in 2012.
But the central bank said private consumption in Malaysia is still expected to remain steady, underpinned by higher incomes, while capital spending in domestic-oriented industries and infrastructure projects will support investment

Malaysia’s inflation rate rose slightly to 1.8 percent in May from 1.7 percent but the central bank said it should rise in the second half of the year due to domestic supply and cost factors.
“Pressures from global commodity prices are also likely to be contained given the moderate global growth prospects,” the central bank said.

Courtesy : http://www.centralbanknews.info/2013/07/malaysia-holds-rate-weak-global-growth.html

for more details log on to Central Bank of Malaysia website : http://www.bnm.gov.my/