Month: December 2013
19th November 2013
Chile’s central bank cut its policy rate by 25 basis points to 4.50 percent, its second rate cut in as many months, with the bank saying data for the third quarter confirmed its expectation that all components of demand were slowing down.
The Central Bank of Chile, which has now cut its rate by 50 basis points this year, also said that inflation was “behaving moderately and market expectations foresee that it will gradually normalize toward 3% within the next 24 months.”
Chile’s inflation rate fell further in October to 1.5 percent from 2.0 percent in September, below the bank’s target range of 2.0-4.0 percent inflation around the 3.0 percent midpoint.
The central bank repeated that it would be flexible in its monetary policy with the aim of inflation at 3 percent.
“Any future changes in the monetary policy rate will depend on the implications of domestic and external macroeconomic conditions on the inflationary outlook,” the bank said.
Chile’s economy is growing moderately, the bank said after data showed that the country’s Gross Domestic Product expanded by 1.3 percent in the third quarter from the second for annual growth of 4.7 percent, up from 4.0 percent.
The global economy is recovering gradually, the bank said, led by the United States while growth in emerging countries is more moderate.
for more details log on to Central Bank of Chile website : http://www.bcentral.cl/eng/index.asp
19 th November 2013
Nigeria’s central bank maintained its Monetary Policy Rate (MPR) at 12.00 percent, as expected, but said it had not yet reached the end of its tightening cycle and may need to tighten in 2014 in response to potential headwinds from higher interest rates in the United States and Europe and domestic spending ahead of the 2015 elections.
The Central Bank of Nigeria (CBN), which has held rates steady since October 2011, also said it’s monetary committee had adopted an inflation target of 6.0 percent to 9.0 percent in 2014 – the same as this year – and “reaffirmed its commitment to moving Nigeria firmly into being a low-inflation environment in the medium term.”
Nine of the committee’s 11 members that were present voted to maintain rates while one member voted to cut the MPR rate by 50 basis points and raise the public sector cash reserve requirement (CRR) to 75 percent from 50 percent. Another member also voted for a 50 point cut in the MPR but to raise the public sector CRR to 100 percent.
Nigeria’s inflation rate fell further to 7.8 percent in October, a low for the year and continuing the trend since early 2010 of falling inflation. The last time Nigeria’s inflation was at this level was in March 2008 when also hit 7.8 percent.
But core inflation rose to 7.6 percent from 7.4 percent in September and the “Committee noted the potential risks to inflation of increased aggregate spending in the run-up to the 2015 elections.”
The central bank expects a continued benign outlook for inflation in the first half of 2014, adding that global monetary conditions were likely to remain loose going into the first quarter of next year.
“First, in the U.S.A., it is clear that the incoming Federal Reserve Chairperson, Janet Yellen, does not see tapering as imminent given the on-going disputes around the budget and the weakness of economic recovery,” the CBN said.
It also noted that the Bank of England (BOE) was not considering raising rates until unemployment falls to 7.0 percent, probably in late 2015; the European Central Bank (ECB) had only just lowered its benchmark rate while the Bank of Japan (BOJ) is likely to continue with quantitative easing until inflation reaches its 2.0 percent target.
“For these reasons, the Committee does not anticipate any major internal or external shocks before its next meeting in January 2014,” the CBN said.
Nigeria’s economy has been steadily expanding with Gross Domestic Product up by an annual 6.81 percent in the second quarter, up from 6.18 percent in the first quarter.
The central bank forecast 2013 growth of 6.87 percent, down from a forecast or 6.91 percent in September, but up from 6.58 percent in 2012. The non-oil sector remains the major engine of growth, with output expanding by 7.95 percent in the third quarter compared with a decline of 0.53 percent for the oil sector.
But the central bank cautioned that financial markets were “extremely fragile and susceptible to external shocks,” noting that excess crude savings have fallen to less than US$5 billion on Nov. 14 from $11.5 billion at the end of 2012 with Nigeria’s external reserves in excess of $45 billion only due to a massive inflow in portfolio funds.
The central bank called on the government to rebuild buffers in the excess crude account by blocking fiscal leakages in the oil sector and raising oil revenues.
“Clearly, the major risk on the fiscal side at present is not one of escalation of spending but loss of revenue from oil exports,” the CBN said.
But the central bank is worried about the outlook for next year, saying the Federal Reserve is expected to start tapering its quantitative easing while interest rates will also rise in Europe, “both of which will lead to some pressure on the exchange rate and stock prices due to the impact on capital flows.”
In addition, the CBN expects domestic spending to pick up in connection with elections.
“As a result, the MPC is of the view that we are not yet at the end of the tightening cycle and may need to tighten further in response to these eventualities next year.”
Like many other currencies, Nigeria’s naira fell sharply in May and hit a low of 163.7 to the U.S. dollar on Sept. 11, down 4.5 percent from 156.35 at the end of 2012. But since then the naira has strengthened and was trading at 159.1 earlier today, down only 1.7 percent on the year.
for more details log on to Central Bank of Nigeria website : http://www.cenbank.org/
14th November 2013
The central bank of Belarus maintained its benchmark refinancing rate at 23.5 percent to ensure an “attractive rate of return” on ruble deposits that exceeds the yield on foreign currencies, helping the bank maintain stable foreign exchange markets and curb inflation.
The National Bank of the Republic of Belarus, a former Soviet Republic that borders Poland, has cut rates by 650 basis points this year, most recently in June, due to falling inflation. But Belarus’ inflation rate was 15.5 percent in October, slightly up from 15.42 in September and 15.0 in August.
The central bank also said in a statement from Nov. 14 that the growth in ruble time deposits was not stable enough despite an increase during October.
In August the central bank said it would continue its “rigorous” monetary policy in the second half of the year in order to reach its inflation target, stabilize the currency market and the deposit market.
The bank’s goal is to bring inflation down to 12 percent and below, with interest rates kept positive to insure a steady inflow of ruble deposits. The bank has asked commercial banks to offer attractive deposit terms and introduce new instruments to help attract deposits.
Another goal of the central bank is to raise the country’s international reserves.
Belarus’ currency, the ruble, has been depreciating steadily since April 2012, and is down 8 percent against the U.S. dollar this year, trading at 9.30 per USD today from 8.55 end-2012.
Belarus went through a balance of payments crises in May 2011 and the country devalued its ruble by about half, igniting inflation that exceeded 100 percent in late 2011 and early 2012. The central bank responded by raising interest rates from 10.5 percent in January 2011 to a high of 45 percent in December 2011.
But by February 2012 the bank started cutting its refinancing rate in response to a steady decline in inflation from a high of 109.73 percent in January 2012.
Belarus’ Gross Domestic Product contracted by an annual 0.5 percent in the second quarter compared with a 3.8 percent expansion in the first quarter
for more details log on to National Bank of the Republic of Belarus website : http://www.nbrb.by/engl/
13th November 2013
Mozambique’s central bank maintained its benchmark standing facility rate at 8.25 percent, saying inflation remains in line with the bank’s objectives although the international and domestic risks have risen and could upset the macroeconomic balance.
The Bank of Mozambique, which has cut its rate three times this year – most recently in October for total rate cuts of 125 basis points – also said it would intervene in money markets to ensure the monetary base does not exceed 45.893 billion meticais by the end of November, up from the target of 44.729 billion by end-October.
Mozambique’s inflation rate was largely steady at 4.42 percent in October compared with September’s 4.52 percent and has fluctuated between 4 percent and 5 percent since February.
In its inflation report released this week, the bank forecast inflation of 5 percent to 6 percent for the fourth quarter, in line with its inflation target for the year.
Citing recent data, the bank said business confidence improved in September following a deterioration in the previous two months, but overall the economic climate deteriorated in the third quarter due to a fall in the outlook for demand.
Mozambique’s economy improved sharply in the second quarter, with Gross Domestic Product up by 6.2 percent from the first, for annual growth of 8.7 percent, up from a 4.3 percent rate in the first quarter.
Mozambique’s net international reserves rose by US$ 62 million to $2.919 billion at the end of October, helped by the inflow of foreign aid, net purchases of $11 million by the central bank, remittance of income from mining worth $5 million. This was countered by payments to the state of $18.3 million and external debt service payments totaling $14.1 million.
Mozambique’s currency, the medical, was quoted at 29.87 to the U.S. dollar on the last day of October, a depreciation of 0.03 percent for the month and a year-on-year fall of 4.11 percent
for more details log on to Bank of Mozambique website : http://www.bancomoc.mz/Default_en.aspx