BankingInterestRates

Albania Central Bank cuts Interest rates by a further 25 bps to 2.75% in the last week of February

Posted on

26th February 2014

Albania’s central bank cut its benchmark repurchase rate and the reserve repurchase rate by a further 25 basis points to 2.75 percent, continuing the easing cycle begun in October 2011.
    The Bank of Albania has now cut its main rates by 250 basis points from 5.25 percent since October 2011, including 100 points in 2013.
    The central bank’s supervisory council did not issue any further comment in connection with the latest rate cut.
    Albania’s inflation rate eased to 1.7 percent in January from 1.9 percent in December while its Gross Domestic Product contracted by an annual rate of 2.3 percent in the third quarter of 2013, down from an expansion of 1.1 percent in the second quarter

Albania cuts rate by a further 25 bps to 2.75% – Central Bank News.

Turkey Central Bank holds Interest rates in the third week of February

Posted on

18th February 2014

Turkey’s central bank maintained its short-term interest rates, including the one-week repo rate at 10.0 percent, and reiterated that a “tight monetary policy stance will be maintained until there is a significant improvement in the inflation outlook.”
     At an emergency meeting of its policy committee last month, the Central Bank of the Republic of Turkey (CBRT) raised its rates in response to a sharp fall in the lira currency and growing inflationary pressures, and pledged to maintain a tight stance until the outlook for inflation improved.
    Following today’s meeting, the central bank said inflation was likely to hover above its 5.0 percent target “for some time due to recent tax adjustments, exchange rate developments, and elevated food prices” while the current account deficit was expected to show a “significant improvement” this year.
    The growth of lending has slowed due to its tight policy stance, weak capital flows and other measures and data from the first quarter of this year showed a deceleration in domestic demand.
    “Meanwhile, with the help of the recovery in foreign demand, the contribution of net exports to economic growth in expected to increase,” the CBRT said.
    Turkey’s inflation rate rose to 7.75 in January from 7.4 percent in December.

    In its January inflation report, the CBRT raised its 2014 inflation forecast by 1.3 percentage points, with the lira’s depreciation accounting for an estimated 0.5 percentage points of that increase and higher taxes for another 0.5 percentage points.
    The central bank forecast that inflation would to ease in the second half of this year and fluctuate between 5.2 percent and 8.0 percent before ending the year at 6.6 percent.
    In 2015 inflation is projected to fall further, fluctuating between 3.1 precedent and 6.9 percent, and stabilize around the bank’s 5.0 percent target by mid-2015.
    In addition to raising its one-week repo rate to 10.0 percent from 4.50 percent on Jan. 28, the CBRT also said this would once again become its primary tool for providing liquidity to markets. At that meeting, the central bank also shifted its overnight rate corridor upwards by raising the marginal funding rate, the ceiling in the corridor, to 12.0 percent from 7.75 percent, and the borrowing rate, or the floor, to 8.0 percent from 3.5 percent.
    “It should be emphasized that any new data or information may lead the Committee to revise its stance,” the CBRT said today.
    In the summary of its Jan. 28 meeting, the central bank said that the current policy stance should be enough to anchor inflation expectations and if necessary, its liquidity policy may be tightened further to invert the slope of the yield curve.
    Economists had expected the central bank to maintain rates today after last month’s surprisingly aggressive move that helped calm financial markets and seems to have put a floor under the lira.
    The lira has been declining ever since early May 2013 and fell to a record low of 2.37 to the U.S. dollar on Jan. 27. Since the rate hike, the lira has strengthened by 8 percent, but is still down 1.4 percent since the beginning of the year. The lira was trading at 2.18 to the dollar today.
    Turkey’s current account deficit widened to US$ 8.322 billion in December from November’s $4.098 billion while its Gross Domestic Product expanded by 0.9 percent in the third quarter from the second quarter for annual growth of 4.4 percent, down from the second quarter’s 4.5 percent rate.
    Earlier this month, Standard & Poor’s cut its outlook on Turkey to negative from stable, citing risks of a hard economic landing amid a less predictable political environment. The rating’s agency said a corruption scandal involving the government of Prime Minister Tayyip Erdogan along with falls in the lira and inflationary pressures had raised concerns about political and economic stability

Turkey holds rates, repeats tight stance till inflation falls – Central Bank News.

Philippines Central Bank holds Interest rates, says inflation is manageable

Posted on Updated on

6th February 2014

The Philippines’ central bank held its policy rates steady, as widely expected, describing inflation as “manageable” and forecast to remain within the central bank’s target ranges this year and 2015.
    The Central Bank of the Philippines (BSP), which has maintained its overnight borrowing rate at 3.50 percent since October 2012, acknowledged that the balance of risks to the inflation outlook remains “slightly weighted towards the upside” given the pending petitions for higher utility rates and the possible rise in food prices.
    Inflation in the Philippines has been accelerating the last five months, hitting 4.2 percent in January, the highest since November 2011 mainly due to higher food prices from adverse weather. The central bank targets inflation at a midpoint of 4.0 percent in 2014, plus/minus 1 percentage points, while in 2015 the inflation target is 3.0 percent, plus/minus 1 percentage point.
    The decision by the BSP’s monetary board was expected following a text message sent by the governor, Amando Tetangco, to reporters on Wednesday in which he said the bank still had room to keep rates steady but that room may be narrowing due to the risks to the inflation outlook.
    In addition to the impact on food prices from Typoon Haiyan, import prices are also likely to be under pressure from the decline in the Philippine peso.
    The peso lost 7.5 percent against the U.S. dollar in 2013 and has lost a further 1.7 percent so far this year, trading at 45.18 to the dollar today.
    The BSP said the global economy had become more challenging due to heightened financial market uncertainty following the adjustment of monetary policy in the United States and concern over the sustainability of growth in emerging market economies.
    But the BSP said domestic activity is likely to stay firm, with buoyant demand, strong fiscal and external positions, as well as favorable consumer and business sentiment supporting the economy.
    The Philippines’ Gross Domestic Product expanded by 1.5 percent in the fourth quarter of last year from the third quarter for annual growth of 6.5 percent, down from 6.9 percent.

Philippines holds rates, says inflation is manageable – Central Bank News.