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Monetary Policy of #Albania #Thailand #CzechRepublic in August 2015

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Global Central Bank Monetary Policy in Review for week ended 27th April 2013

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Monetary Policy Week in Review – Apr 27, 2013: One central bank cuts, pressure grows on Europe’s politicians – Central Bank News.

Last week nine central banks took policy decisions, with Hungary continuing its rate-cutting spree and the other eight banks (Namibia, New Zealand, Philippines, Fiji, Japan, Mexico, Colombia and Trinidad & Tobago) keeping rates unchanged as pressure mounted on euro zone policy makers to get serious about reforms and speed up growth.
    A quiet exasperation over the lack of action by Europe’s policy makers turned into more forceful criticism during the annual meeting of the International Monetary Fund in Washington D.C. with signs that the dogged belief in austerity as a growth strategy is starting to break down.
    The other theme dominating central banking last week was the continuing fallout from Japan’s aggressive policy easing, which has lead to a weaker yen and upward pressure on other currencies as some of the Bank of Japan’s money looks for higher yield outside the country.
    The Bank of Korea’s governor expressed his concern over the impact of the weaker yen on the competitiveness of his country’s industry; the Bank of Thailand is considering how to reduce the upward pressure on the bath; the Reserve Bank of New Zealand said upward pressure on the overvalued kiwi dollar was growing and the Bank of Israel said money was flowing into its bonds.
    Last year’s warning by Mervyn King, the outgoing governor of the Bank of England, that 2013 could feature “actively managed exchange rates as an alternative to the use of domestic monetary policy” was prescient and slightly ominous.

    Through the first 17 weeks of this year, the overwhelming majority of the world’s central banks have kept their rates on hold: 78 percent of the 156 policy decisions taken so far by the 90 central banks followed by Central Bank News have lead to unchanged rates, slightly up from 77 percent after 16 weeks.
    Globally, 19 percent of policy decisions this year have lead to rate cuts – largely by central banks in emerging economies – unchanged from last week.
    Rate rises are still rare – there have only been six so far this year – but this number is likely to rise in the second half of the year as global growth slowly strengthens and inflationary pressures rise, especially in Southeast Asia.

    The only real sinkhole in global growth remains Europe and policy makers from around the world appear to be losing their patience with the euro zone’s lack of progress in solving its problems. 
    Through the barrage of statements and communiqués from the IMF and G20 meetings, it is clear that global policy makers have decided that Europe’s experiment with harsh austerity has gone far enough. Recession, popular dissatisfaction and growing unemployment bear witness to the strategy’s failure.
    There was a remarkable confluence of criticism of austerity last week: The validity of the academic work used to underpin pro-austerity policies was questioned; the IMF stressed that fiscal tightening should only occur at a pace that economic recovery can handle – underlining the shift away from its traditional position as an advocate of austerity – while African finance ministers insisted euro zone politicians “work harder and faster” so growth in their own economies isn’t undermined.
    The bottom line is that the fragile global economic recovery may falter without growth in Europe and this year it’s economy is set to contract for the second year in a row.
    And the criticism, all too often shouted through the streets of Athens, Madrid, Rome and Lisbon, is finally being heard by a growing number of top policy makers.
    Christine Lagarde, IMF managing director, talked of  “adjustment fatigue” and growing tensions over the fairness of public policy, while European Commission President Jose Manuel Barroso said the combination of lower spending and higher taxes may have hit the limits of public acceptance and was now contributing to the recession.
    But so far the austerity camp seems unbowed and one its leading proponents, German Chancellor Angela Merkel, even had the audacity to up the ante, saying the European Central Bank would have to raise interest rates if its policy was based purely on German conditions.
    Although Germany is doing better than many of its euro zone brethren, it’s economy is hardly in need of cooling. The German economy shrank by 0.6 percent in the fourth quarter of 2012 from the third quarter and is forecast to grow a mere 0.5 percent in 2013, it’s inflation rate fell to 1.4 percent in March, below the ECB’s target, and the unemployment rate is 5.4 percent.


LAST WEEK’S (WEEK 17) MONETARY POLICY DECISIONS:
COUNTRY MSCI     NEW RATE         OLD RATE        1 YEAR AGO
HUNGARY EM 4.75% 5.00% 7.00%
NAMIBIA 5.50% 5.50% 6.00%
NEW ZEALAND DM 2.50% 2.50% 2.50%
PHILIPPINES EM 3.50% 3.50% 4.00%
FIJI 0.50% 0.50% 0.50%
JAPAN DM 0.00% 0.00% 0.10%
TRINIDAD & TOBAGO 2.75% 2.75% 3.00%
MEXICO EM 4.00% 4.00% 4.50%
COLOMBIA EM 3.25% 3.25% 5.25%
Next week (week 18) features seven central bank policy decisions, including heavyweights the United States, the European Central Bank and India, plus Angola, the Czech Republic, Romania and Uganda.
COUNTRY MSCI              DATE               RATE        1 YEAR AGO
ANGOLA 29-Apr 10.00% 10.25%
UNITED STATES DM 1-May 0.25% 0.25%
EURO AREA DM 2-May 0.75% 1.00%
CZECH REPUBLIC EM 2-May 0.05% 0.75%
ROMANIA FM 2-May 5.25% 5.25%
UGANDA 3-May 12.00% 20.00%
INDIA EM 3-May 7.50% 8.00%

 

Monetary Policy Week in Review for last week – Central Bank News

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Monetary Policy Week in Review – Mar 30, 2013: Chance of global crises eases as 3 banks cut rates, 8 hold, 1 raises – Central Bank News.

Last week 12 central banks took policy decisions with three banks cutting rates (Vietnam,Hungary and Georgia), eight keeping rates on hold (Israel, AngolaTurkeyMoroccoTaiwan,ZambiaCzech Republic and Romania) and Tunisia becoming the fifth central bank to raise rates this year.
    The main message gleaned from central banks last week was that the global economy continues to recover, but every time it seems to pick up a little steam, confidence is undermined by developments in Europe, the only major risk to a sustained recovery. 
    But like a resilient boxer, the global economy dusts itself off and gets back on its feet, adjusting to the fact that large bank depositors in Europe may have to share the costs of future bank bailouts with tax payers, the main lesson from Cyprus.
    After the shock from this major but ultimately positive policy shift, there was a sense of relief that Europe had muddled through, once again, and financial markets had taken the events in stride.
     “It appears that there has been a decline in the probability of a crises occurring, a development which has reduced the high level of uncertainty that prevailed in the last year,” the Bank of Israel said in its statement.
    But as both Israel and the Reserve Bank of Australia (RBA) acknowledged, the global economic picture remains mixed and “it is too early to say whether the improved market sentiment over the past six months is the beginning of a sustained recovery, or merely a temporary upswing.”
    The challenges facing Europe’s policy makers is considerable. Not only do they have to restore financial health to governments and banks, they must also find ways to strengthen economic growth at a time of growing challenges from emerging markets.
    “The renewed market tension associated with the handling of the sovereign and banking crisis in Cyprus in recent weeks has provided a reminder of the political, economic and social challenges of resolving the pervasive fiscal and banking sector problems,” the RBA said in its financial review.
     In the latest manifestation of the structural shift in the global economy – illustrated by a stagnating Europe and growing emerging markets – the leaders of Brazil, Russia, India, and South Africa and China agreed to establish a New Development Bank.
    The leaders of these five countries, known as the BRICS countries, acknowledged that their infrastructure has to be improved but currently there is insufficient long-term and foreign investment in capital stock.
    Acknowledging their role and responsibility for global governance, the BRICS leaders said a bank, which now will be established, would use global financial resources more productively and thus make a positive contribution in boosting global demand.
    They also agreed to establish a $100 billion financial reserve arrangement that would “help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability,” the leaders said in their March 27 Durban declaration.
     The Contingent Reserve Arrangement (CRA) would help strengthen the global financial safety net during times of market turmoil.
         
    Through the first 13 weeks of the year, 77 percent of the 125 policy decisions taken by the 90 central banks followed by Central Bank News lead to unchanged rates, marginally down from 78 percent after the first 11 weeks.
    Globally, 19 percent of policy decisions this year have lead to rate cuts, largely by central banks in emerging economies, a ratio that was steady from last week.
    Of the 24 rate cuts worldwide so far this year, 42 percent have come from central banks in emerging markets and the remainder from frontier markets and other countries.
    No central banks in developed markets have cut rates this year, but this is largely because many of those central banks slashed rates to effectively zero five years ago and then switched to various forms of so-called quantitative easing to stimulate demand.
LAST WEEK’S (WEEK 13) MONETARY POLICY DECISIONS:
COUNTRY MSCI     NEW RATE           OLD RATE        1 YEAR AGO
ISRAEL DM 1.75% 1.75% 2.50%
VIETNAM FM 8.00% 9.00% 14.00%
ANGOLA 10.00% 10.00% 10.25%
TURKEY EM 5.50% 5.50% 5.75%
MOROCCO EM 3.00% 3.00% 3.00%
HUNGARY EM 5.00% 5.25% 7.00%
GEORGIA 4.50% 4.75% 6.50%
TAIWAN EM 1.88% 1.88% 1.88%
ZAMBIA 9.25% 9.25% 9.00%
CZECH REPUBLIC EM 0.05% 0.05% 0.75%
TUNISIA FM 4.00% 3.75% 3.50%
ROMANIA FM 5.25% 5.25% 5.25%
Next week (week 14) features six central bank policy decisions, including Australia, Thailand, Uganda, Japan, United Kingdom and the euro area.
COUNTRY MSCI          MEETING               RATE        1 YEAR AGO
AUSTRALIA DM 2-Apr 3.00% 4.25%
THAILAND EM 3-Apr 2.75% 3.00%
UGANDA 3-Apr 12.00% 21.00%
JAPAN DM 4-Apr 0.10% 0.10%
UNITED KINGDOM DM 4-Apr 0.50% 0.50%
EURO AREA DM 4-Apr 0.75% 1.00%