#England #BankOfEngland #MonetaryPolicy #BankRate #AssetPurchaseProgram #Mexico #Target #Ukraine #NationalBankOfUkraine #OvernightInterbankRate #BancoDeMexico #Finance #JhunjhunwalasFinance
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Showing posts with label BankingInterestRates. Show all posts
Showing posts with label BankingInterestRates. Show all posts
Monday, 8 June 2015
#Monetary #Policy Update of #England #Mexico #Ukraine in 2015
#England #BankOfEngland #MonetaryPolicy #BankRate #AssetPurchaseProgram #Mexico #Target #Ukraine #NationalBankOfUkraine #OvernightInterbankRate #BancoDeMexico #Finance #JhunjhunwalasFinance
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Tuesday, 8 April 2014
Georgia Central Bank holds Monetary Policy rates on geopolitical risk in the last week of March
26th March 2014
Georgia's central bank held its policy rate steady at 4.0 percent, saying it still believes there is a need for a gradual withdrawal of monetary stimulus but the policy rate was maintained due to the increased geopolitical risks and uncertainty.
The National Bank of Georgia, which raised its rate by 25 basis points in February after cutting by 150 basis points in 2013, said it still expects inflation to be between 5 and 6 percent in the second half of this year with aggregate demand expected to recover further.
Georgia's inflation rate rose to 3.46 percent in February, the fifth consecutive month of accelerating inflation after deflation in most of 2012 and 2013. The central bank targets inflation of 6.0 percent and said last month that there was no need to maintain an easy policy stance as economic growth was improving and it should continue to improve in the first half of this year.
The central bank's forecast is based on a balance of risks but it cautioned that the recent escalation of geopolitical factors and economic uncertainty pose a threat.
"In particular, the deterioration in the economic environment could affect the economy through several channels, including reduced demand for exports, investors' mood and lower remittances," the bank said.
Georgia, which gained independence from the Soviet Union in 1991, is located in the Caucasus region, bordering the Black Sea on the west, Turkey on the south and Russia on the north. The Crimean peninsula, which has been annexed by Russia from Ukraine, also lies is in the Black Sea.
Georgia's Gross Domestic Product grew by an annual 7.1 percent in the fourth quarter of 2013 and the bank said annual growth in January was estimated at 7.8 percent due to growing exports.
Exports from Georgia eased to US$ 216.15 million in February from $223.61 in January.
Georgia's lari currency depreciated by 4.6 percent against the U.S. dollar last year, raising the inflation rate by an estimated 1 percentage point. It continued to decline until late January when it started to rise. Earlier today it was trading at 1.74 to the U.S. dollar, steady since the end of 2013.
Georgia holds rate on geopolitical risk, but sees tightening - Central Bank News
Georgia's central bank held its policy rate steady at 4.0 percent, saying it still believes there is a need for a gradual withdrawal of monetary stimulus but the policy rate was maintained due to the increased geopolitical risks and uncertainty.
The National Bank of Georgia, which raised its rate by 25 basis points in February after cutting by 150 basis points in 2013, said it still expects inflation to be between 5 and 6 percent in the second half of this year with aggregate demand expected to recover further.
Georgia's inflation rate rose to 3.46 percent in February, the fifth consecutive month of accelerating inflation after deflation in most of 2012 and 2013. The central bank targets inflation of 6.0 percent and said last month that there was no need to maintain an easy policy stance as economic growth was improving and it should continue to improve in the first half of this year.
The central bank's forecast is based on a balance of risks but it cautioned that the recent escalation of geopolitical factors and economic uncertainty pose a threat.
"In particular, the deterioration in the economic environment could affect the economy through several channels, including reduced demand for exports, investors' mood and lower remittances," the bank said.
Georgia, which gained independence from the Soviet Union in 1991, is located in the Caucasus region, bordering the Black Sea on the west, Turkey on the south and Russia on the north. The Crimean peninsula, which has been annexed by Russia from Ukraine, also lies is in the Black Sea.
Georgia's Gross Domestic Product grew by an annual 7.1 percent in the fourth quarter of 2013 and the bank said annual growth in January was estimated at 7.8 percent due to growing exports.
Exports from Georgia eased to US$ 216.15 million in February from $223.61 in January.
Georgia's lari currency depreciated by 4.6 percent against the U.S. dollar last year, raising the inflation rate by an estimated 1 percentage point. It continued to decline until late January when it started to rise. Earlier today it was trading at 1.74 to the U.S. dollar, steady since the end of 2013.
Georgia holds rate on geopolitical risk, but sees tightening - Central Bank News
Saturday, 22 March 2014
Indonesia Central bank holds Interest Rates in the second week of March
13th March 2014
Indonesia's central bank maintained its benchmark BI rate at 7.50 percent, as expected, and said it expects inflation to return to its target corridor in 2014 while it cut its economic growth forecast.
Bank Indonesia (BI), which raised the BI rate by a sharp 175 basis points last year to curb inflation and defend the embattled rupiah currency, also said the balance of trade is expected to return to surplus as exports were accelerating due to strong demand from leading trading partners while imports remain sluggish due to moderating domestic demand.
"Recent developments indicate that the rate of inflation is under control and the current account deficit is shrinking," the BI said in a generally upbeat statement.
Indonesia's headline inflation rate fell to 7.75 percent in February from 8.22 percent in January in what the BI described as a "dramatic decline," continuing the gradual decline since July 2013 when it jumped due to a reduction in government fuel subsidies.
In August inflation hit a 2013-high of 8.79 percent and prices remained under pressure due to the impact of the rupiah's depreciation along with higher food prices from flooding.
"The rate of inflation continued to trend downwards in February 2014, reinforcing the prospect of achieving the inflation target in 2014, more specifically 4.5 +/- 1 %, " the BI said.
The BI said core inflation in February was under control at 4.57 percent, up from 4.53 percent, and attributed the "impressive gains made in terms of core inflation" to the policy by central and local governments to minimize the second-round effects of recent natural disasters.
The recent appreciation of the rupiah has also minimized the impact of higher international commodity prices, the BI said, adding it will remain cautious of potential price pressures from changes to administered prices and reinforce the policy mix with the government to ensure inflation remains on track with the inflation target.
After tumbling almost 21 percent in 2013, the rupiah has bounced back this year and rose 5.18 percent against the U.S. dollar in February from January. This month it has continued to firm, quoted today at 11,379 to the dollar, up from 11,609 end February.
"Sound economic fundamentals are driving improvements in the external sector performance, which in turn is strengthening the rupiah exchange rate," the BI said, adding that foreign exchange reserves amounted to US$ 102.7 billion in February, equivalent to 5.7 months of imports and debt servicing.
A January trade deficit US$ 430 million was due to seasonal factors, the BI said, and it expects the trade balance to return to surplus while the current account deficit is expected to be managed at a level below 3 percent of Gross Domestic Product.
In the fourth quarter of 2013 the current account deficit narrowed to $4.018 billion from $8.449 the previous quarter and the BI said it expects inflows of foreign capital to escalate as the domestic economy strengthens. Up to February, inflows of foreign portfolio funds to Indonesia's markets amounted to 34.6 trillion rupiah.
Indonesia's economy has slowed in recent months and the central bank said household consumption is predicted to slow compared with its projections due to a limited impact of elections.
Indonesia's Gross Domestic Product contracted by 1.42 percent in the fourth quarter from the third quarter for annual growth of 5.72 percent, up from 5.62 percent.
But the growth of investment, including non-construction investment, is projected to rebound in the second quarter while exports will accelerate but not as much as forecast due to tepid global economic growth and the temporary impact of the ban of exports of most mineral ores.
"Against this backdrop, Bank Indonesia projects the domestic economy to expand by 5.5-5.9%," the bank said. Previously, the BI forecast 2014 growth in the lower end of a 5.8-6.2 percent range
Indonesia holds, inflation to hit target in '14, growth lower - Central Bank News
Indonesia's central bank maintained its benchmark BI rate at 7.50 percent, as expected, and said it expects inflation to return to its target corridor in 2014 while it cut its economic growth forecast.
Bank Indonesia (BI), which raised the BI rate by a sharp 175 basis points last year to curb inflation and defend the embattled rupiah currency, also said the balance of trade is expected to return to surplus as exports were accelerating due to strong demand from leading trading partners while imports remain sluggish due to moderating domestic demand.
"Recent developments indicate that the rate of inflation is under control and the current account deficit is shrinking," the BI said in a generally upbeat statement.
Indonesia's headline inflation rate fell to 7.75 percent in February from 8.22 percent in January in what the BI described as a "dramatic decline," continuing the gradual decline since July 2013 when it jumped due to a reduction in government fuel subsidies.
In August inflation hit a 2013-high of 8.79 percent and prices remained under pressure due to the impact of the rupiah's depreciation along with higher food prices from flooding.
"The rate of inflation continued to trend downwards in February 2014, reinforcing the prospect of achieving the inflation target in 2014, more specifically 4.5 +/- 1 %, " the BI said.
The BI said core inflation in February was under control at 4.57 percent, up from 4.53 percent, and attributed the "impressive gains made in terms of core inflation" to the policy by central and local governments to minimize the second-round effects of recent natural disasters.
The recent appreciation of the rupiah has also minimized the impact of higher international commodity prices, the BI said, adding it will remain cautious of potential price pressures from changes to administered prices and reinforce the policy mix with the government to ensure inflation remains on track with the inflation target.
After tumbling almost 21 percent in 2013, the rupiah has bounced back this year and rose 5.18 percent against the U.S. dollar in February from January. This month it has continued to firm, quoted today at 11,379 to the dollar, up from 11,609 end February.
"Sound economic fundamentals are driving improvements in the external sector performance, which in turn is strengthening the rupiah exchange rate," the BI said, adding that foreign exchange reserves amounted to US$ 102.7 billion in February, equivalent to 5.7 months of imports and debt servicing.
A January trade deficit US$ 430 million was due to seasonal factors, the BI said, and it expects the trade balance to return to surplus while the current account deficit is expected to be managed at a level below 3 percent of Gross Domestic Product.
In the fourth quarter of 2013 the current account deficit narrowed to $4.018 billion from $8.449 the previous quarter and the BI said it expects inflows of foreign capital to escalate as the domestic economy strengthens. Up to February, inflows of foreign portfolio funds to Indonesia's markets amounted to 34.6 trillion rupiah.
Indonesia's economy has slowed in recent months and the central bank said household consumption is predicted to slow compared with its projections due to a limited impact of elections.
Indonesia's Gross Domestic Product contracted by 1.42 percent in the fourth quarter from the third quarter for annual growth of 5.72 percent, up from 5.62 percent.
But the growth of investment, including non-construction investment, is projected to rebound in the second quarter while exports will accelerate but not as much as forecast due to tepid global economic growth and the temporary impact of the ban of exports of most mineral ores.
"Against this backdrop, Bank Indonesia projects the domestic economy to expand by 5.5-5.9%," the bank said. Previously, the BI forecast 2014 growth in the lower end of a 5.8-6.2 percent range
Indonesia holds, inflation to hit target in '14, growth lower - Central Bank News
Monday, 17 March 2014
Kenya Central Bank maintains Interest rates to anchor inflation expectations
4th March 2014
Kenya's central bank maintained its Central Bank Rate (CBR) at 8.50 percent to continue anchoring inflation expectations as inflation remains in the upper bound of the bank's medium term target of 5.0 percent despite its recent decline.
However, the Central Bank of Kenya (CBK), which has held its rate steady since May 2013 after cutting it by 250 basis points in the first months of the year, said overall inflation eased to 6.86 percent in February from January's 7.21 percent while non-food, non-fuel inflation (NFNF) had risen slightly to 4.93 percent from 4.83 percent, indicating that its policy stance had supported a stable inflation rate and that private sector credit growth was non-inflationary.
The CBK added that both 1-month and 3-month inflation measures had stabilized in February, "indicating an easing of underlying inflationary pressure."
The central bank targets inflation in a range of 2.5 percentage points around a 5 percent midpoint. Inflation remained within the CBK's range last year apart from September and October when inflation exceeded the upper limit following the imposition of a 16 percent valued-added-tax on some goods.
Kenya's shilling has also been stable in the last month, fluctuating within a narrower range of 86.06 to 86.58 to the U.S. dollar compared with a range of 85.46 to 86.96 in January.
The central bank said its level of foreign reserves had risen to US$ 6.258 billion at the end of February, the equivalent of 4.38 months of imports, from $6.165 billion end December, mainly due to commercial banks selling foreign exchange to the CBK.
It added that Kenya's cumulative current account deficit had improved to 8.09 percent of Gross Domestic Product by December 2013, down from a deficit of 10.45 percent in 2012, while the government's borrowing program for fiscal 2013/14 was consistent with monetary policy objectives. This means the the private sector will not be crowded out, an effect that could jeopardize the expected increase in private investment.
Kenya's banking sector also remains solvent, according to the latest stress tests, with annual growth in private sector credit of 20.47 percent in January, up from 20.08 percent in December, and confidence in the economy remains strong with the central bank's market perception survey from February showing that the private sector expects inflation and the exchange rate to remain stable for the remainder of this year and sustained optimism for strong economic growth in 2014.
The central bank also noted that Fitch Ratings had affirmed Kenya's long-term foreign and local currency rating at B+ and BB-, respectively, with a stable outlook, while activity on the Nairobi stock exchange had been buoyant and diaspora remittances continued to average over $110 million a month between July 2013 and January 2014.
Kenya's GDP expanded by 1.6 percent in the third calendar quarter of 2013 from the second quarter for annual growth of 4.4 percent, up from 4.3 percent in the second quarter
Kenya maintains rate to anchor inflation expectations - Central Bank News
Kenya's central bank maintained its Central Bank Rate (CBR) at 8.50 percent to continue anchoring inflation expectations as inflation remains in the upper bound of the bank's medium term target of 5.0 percent despite its recent decline.
However, the Central Bank of Kenya (CBK), which has held its rate steady since May 2013 after cutting it by 250 basis points in the first months of the year, said overall inflation eased to 6.86 percent in February from January's 7.21 percent while non-food, non-fuel inflation (NFNF) had risen slightly to 4.93 percent from 4.83 percent, indicating that its policy stance had supported a stable inflation rate and that private sector credit growth was non-inflationary.
The CBK added that both 1-month and 3-month inflation measures had stabilized in February, "indicating an easing of underlying inflationary pressure."
The central bank targets inflation in a range of 2.5 percentage points around a 5 percent midpoint. Inflation remained within the CBK's range last year apart from September and October when inflation exceeded the upper limit following the imposition of a 16 percent valued-added-tax on some goods.
Kenya's shilling has also been stable in the last month, fluctuating within a narrower range of 86.06 to 86.58 to the U.S. dollar compared with a range of 85.46 to 86.96 in January.
The central bank said its level of foreign reserves had risen to US$ 6.258 billion at the end of February, the equivalent of 4.38 months of imports, from $6.165 billion end December, mainly due to commercial banks selling foreign exchange to the CBK.
It added that Kenya's cumulative current account deficit had improved to 8.09 percent of Gross Domestic Product by December 2013, down from a deficit of 10.45 percent in 2012, while the government's borrowing program for fiscal 2013/14 was consistent with monetary policy objectives. This means the the private sector will not be crowded out, an effect that could jeopardize the expected increase in private investment.
Kenya's banking sector also remains solvent, according to the latest stress tests, with annual growth in private sector credit of 20.47 percent in January, up from 20.08 percent in December, and confidence in the economy remains strong with the central bank's market perception survey from February showing that the private sector expects inflation and the exchange rate to remain stable for the remainder of this year and sustained optimism for strong economic growth in 2014.
The central bank also noted that Fitch Ratings had affirmed Kenya's long-term foreign and local currency rating at B+ and BB-, respectively, with a stable outlook, while activity on the Nairobi stock exchange had been buoyant and diaspora remittances continued to average over $110 million a month between July 2013 and January 2014.
Kenya's GDP expanded by 1.6 percent in the third calendar quarter of 2013 from the second quarter for annual growth of 4.4 percent, up from 4.3 percent in the second quarter
Kenya maintains rate to anchor inflation expectations - Central Bank News
Tuesday, 4 March 2014
Hungary Central Bank cuts Interest rates by 15 bps in the third week of February
18th February 2014
Hungary's central bank cut its base rate by another 15 basis points to 2.70 percent, its 19th cut in a row, but signaled that it may call a halt to further cuts by saying it would first decide on further moves following a review of the economic outlook in next month's economic forecast.
The National Bank of Hungary, which has cut rates by 430 basis points since embarking on an easing cycle in August 2012, noted a deterioration in investors' view of Hungary and other emerging markets during the recent volatility in global financial markets, with the country's bond yields rising and higher volatility in the forint's exchange rate.
"In the council's judgement, a cautious approach to policy is warranted due to uncertainty related to the global financial environment," the central bank said.
However, the central bank also said Hungary's position was stronger than other emerging market economies, pointing to a decline in its external debt and a surplus in the current account that has reduced the country's reliance on foreign investors.
But the central bank acknowledged that room for manoeuvre in monetary policy was influenced by investors' perception along with how well inflation was approaching its 3.0 percent target.
"The Monetary Council will decide on the need and possibility for continuing the easing cycle after a comprehensive assessment of the macroeconomic outlook and developments in perceptions of the risks about the economy in view of the baseline projection and alternative scenarios of the March forecast," the central bank said.
Hungary's headline inflation rate fell to zero in January from 0.9 percent in December while the central bank's own gauge of underlying inflation showed a rise in core inflation to 1.6 percent in January from 1.1 percent in December.
The drop in inflation was due to a moderation of fuel prices and the central bank said its own inflation gauge indicated moderate inflationary pressures due to weak domestic demand and low external inflation, helping anchor inflation expectations.
"Domestic real economic factors are expected to continue to have a disinflationary impact, although to a declining extent, as activity rises further," the central bank said. The bank has said it expects inflation to move back toward its 3.0 percent target by the second quarter of 2015.
Economic growth in Hungary is likely to continue to strengthen this year and next and while employment is rising, the central bank said unemployment still exceeds the long-term level and there is unused capacity so inflationary pressures are likely to remain subdued over the medium term.
Hungary's Gross Domestic Product expanded by a higher-than-expected 0.6 percent in the fourth quarter from the third quarter for annual growth of 2.7 percent, up from 1.8 percent, and the central bank said growth should pick up further in the quarters ahead, helped by higher corporate investment.
But growth in real incomes will be partly offset by continued reduction in debt that was accumulated in the years before the financial crises.
From August 2012 the central bank cut rates in 25-basis point increments until August 2013 when it reduced the pace of rate cuts to 20 basis points following an large outflow of capital from emerging markets, including Hungary. The central bank continued cutting rates in 20-basis points increments until last month when it reduced this to 15 basis points, as this month.
Hungary's forint currency has been depreciating against the euro since mid-2012 and has continued to decline this year. The forint was trading at 310.33 to the euro today, down 4.3 percent since the beginning of the year.
Hungary cuts rate by 15 bps, to review stance in March - Central Bank News
Hungary's central bank cut its base rate by another 15 basis points to 2.70 percent, its 19th cut in a row, but signaled that it may call a halt to further cuts by saying it would first decide on further moves following a review of the economic outlook in next month's economic forecast.
The National Bank of Hungary, which has cut rates by 430 basis points since embarking on an easing cycle in August 2012, noted a deterioration in investors' view of Hungary and other emerging markets during the recent volatility in global financial markets, with the country's bond yields rising and higher volatility in the forint's exchange rate.
"In the council's judgement, a cautious approach to policy is warranted due to uncertainty related to the global financial environment," the central bank said.
However, the central bank also said Hungary's position was stronger than other emerging market economies, pointing to a decline in its external debt and a surplus in the current account that has reduced the country's reliance on foreign investors.
But the central bank acknowledged that room for manoeuvre in monetary policy was influenced by investors' perception along with how well inflation was approaching its 3.0 percent target.
"The Monetary Council will decide on the need and possibility for continuing the easing cycle after a comprehensive assessment of the macroeconomic outlook and developments in perceptions of the risks about the economy in view of the baseline projection and alternative scenarios of the March forecast," the central bank said.
Hungary's headline inflation rate fell to zero in January from 0.9 percent in December while the central bank's own gauge of underlying inflation showed a rise in core inflation to 1.6 percent in January from 1.1 percent in December.
The drop in inflation was due to a moderation of fuel prices and the central bank said its own inflation gauge indicated moderate inflationary pressures due to weak domestic demand and low external inflation, helping anchor inflation expectations.
"Domestic real economic factors are expected to continue to have a disinflationary impact, although to a declining extent, as activity rises further," the central bank said. The bank has said it expects inflation to move back toward its 3.0 percent target by the second quarter of 2015.
Economic growth in Hungary is likely to continue to strengthen this year and next and while employment is rising, the central bank said unemployment still exceeds the long-term level and there is unused capacity so inflationary pressures are likely to remain subdued over the medium term.
Hungary's Gross Domestic Product expanded by a higher-than-expected 0.6 percent in the fourth quarter from the third quarter for annual growth of 2.7 percent, up from 1.8 percent, and the central bank said growth should pick up further in the quarters ahead, helped by higher corporate investment.
But growth in real incomes will be partly offset by continued reduction in debt that was accumulated in the years before the financial crises.
From August 2012 the central bank cut rates in 25-basis point increments until August 2013 when it reduced the pace of rate cuts to 20 basis points following an large outflow of capital from emerging markets, including Hungary. The central bank continued cutting rates in 20-basis points increments until last month when it reduced this to 15 basis points, as this month.
Hungary's forint currency has been depreciating against the euro since mid-2012 and has continued to decline this year. The forint was trading at 310.33 to the euro today, down 4.3 percent since the beginning of the year.
Hungary cuts rate by 15 bps, to review stance in March - Central Bank News
Peru Central Bank holds rate, cuts reserve requirements in second week of February
13th February 2013
Peru's central bank maintained its monetary policy reference rate at 4.0 percent but again lowered the reserve requirements on the domestic soles currency by 100 basis points to 13 percent and said that it would "implement additional measures to ease its monetary policy instruments" if necessary.
The Central Bank of Peru (BCRP), which cuts it rate by 25 basis points in November as a preventative move, also said the economy slowed down until the third quarter of last year but indicators and surveys about expectations "show a recovery of economic activity in the first quarter of this year."
Peru's Gross Domestic Product rose by 0.8 percent in the third quarter of last year from the second quarter for annual growth of 4.4 percent, down from the second quarter's 5.6 percent.
Economic growth remains below the country's potential while inflation expectations remain anchored within the central bank's target range of 1.0 to 3.0 percent with a 2.0 percent midpoint.
Peru's inflation rate rose to 3.07 percent in January from December's 2.86 percent and an average 2013 rate of 2.86 percent. The bank said the current reference rate of 4.0 percent was compatible with an inflation forecast of 2 percent in the 2014-2015 horizon
Peru holds rate, cuts reserve requirements again - Central Bank News
Peru's central bank maintained its monetary policy reference rate at 4.0 percent but again lowered the reserve requirements on the domestic soles currency by 100 basis points to 13 percent and said that it would "implement additional measures to ease its monetary policy instruments" if necessary.
The Central Bank of Peru (BCRP), which cuts it rate by 25 basis points in November as a preventative move, also said the economy slowed down until the third quarter of last year but indicators and surveys about expectations "show a recovery of economic activity in the first quarter of this year."
Peru's Gross Domestic Product rose by 0.8 percent in the third quarter of last year from the second quarter for annual growth of 4.4 percent, down from the second quarter's 5.6 percent.
Economic growth remains below the country's potential while inflation expectations remain anchored within the central bank's target range of 1.0 to 3.0 percent with a 2.0 percent midpoint.
Peru's inflation rate rose to 3.07 percent in January from December's 2.86 percent and an average 2013 rate of 2.86 percent. The bank said the current reference rate of 4.0 percent was compatible with an inflation forecast of 2 percent in the 2014-2015 horizon
Peru holds rate, cuts reserve requirements again - Central Bank News
Saturday, 1 March 2014
South Korea Central Bank holds Interest rates in the second week of February
12th February 2014
South Korea's central bank maintained its base rate at 2.50 percent, as expected, saying the economic recovery is continuing and inflation will remain low for the being, due to stable international commodity prices, but eventually rise.
The Bank of Korea (BOK), which cut its rate by 25 basis points in 2013, also said it expects the global economy to sustain its "modest" recovery going forward but it could be affected by changes in global financial market conditions from the U.S. Federal Reserve's tapering of quantitative easing and weaker growth in some emerging markets.
Some of the indicators related to domestic demand in Korea have recently slumped, the BOK said, but exports continue to rise, sustaining the overall economic expansion.
Korea's Gross Domestic Product expanded by an annual 3.9 percent in the fourth quarter of last year, up from 3.3 percent in the third quarter, for average 2013 growth of 2.8 percent, up from 2.0 percent in 2012, and the strongest growth in two years.
"The Committee expects that the domestic economy will maintain a negative output gap for the time being going forward, although it forecasts that the gap will gradually narrow," the BOK said.
Last month the BOK forecast that Korea's economy would expand by 3.8 percent in 2014 and then accelerate to 4.0 percent in 2015.
Korea's inflation rate averaged 1.3 percent in 2013, far below the BOK's target range of 2.5-3.5 percent, but in its latest forecast the bank expects inflation this year to rise to 2.3 percent and then to 2.8 percent in 2015.
In the first half of this year inflation is expected to remain below the bank's target range but then rise in the second half.
In January, Korea's headline inflation rate was steady at 1.1 percent from December.
The BOK said Korean stock prices had recently rebounded and the won appreciated, reversing a depreciation of the won and lower stock prices due to the instability of international financial markets and outflows of foreigners' stock investment funds.
Against the U.S. dollar, the won depreciated in the first half of 2013 before rebounding in the second half to end the year only 0.7 percent firmer. Since the start of the year, the won has eased 0.6 percent, trading at 1062.4 to the dollar today.
Against the Japanese yen, the won has been rising since October 2011 when it hit a low of 15.6 and declined to 10 to the yen around the end of 2013, a rise of almost 36 percent. Since the start of this year, the won has eased slightly but was still trading at 10.36 today.
Last month the governor of the BOK, Kim Choongsoo said the rapid depreciation of the yen against the won over the last year has hurt the South Korean industries that compete directly with Japan - such as steel, autos, machinery and electrical appliances - and any further depreciation of the yen would cause widespread pain to South Korea's exporters.
However, he also ruled out a competitive devaluation of the won
South Korea holds rate, recovery continues, inflation low - Central Bank News
South Korea's central bank maintained its base rate at 2.50 percent, as expected, saying the economic recovery is continuing and inflation will remain low for the being, due to stable international commodity prices, but eventually rise.
The Bank of Korea (BOK), which cut its rate by 25 basis points in 2013, also said it expects the global economy to sustain its "modest" recovery going forward but it could be affected by changes in global financial market conditions from the U.S. Federal Reserve's tapering of quantitative easing and weaker growth in some emerging markets.
Some of the indicators related to domestic demand in Korea have recently slumped, the BOK said, but exports continue to rise, sustaining the overall economic expansion.
Korea's Gross Domestic Product expanded by an annual 3.9 percent in the fourth quarter of last year, up from 3.3 percent in the third quarter, for average 2013 growth of 2.8 percent, up from 2.0 percent in 2012, and the strongest growth in two years.
"The Committee expects that the domestic economy will maintain a negative output gap for the time being going forward, although it forecasts that the gap will gradually narrow," the BOK said.
Last month the BOK forecast that Korea's economy would expand by 3.8 percent in 2014 and then accelerate to 4.0 percent in 2015.
Korea's inflation rate averaged 1.3 percent in 2013, far below the BOK's target range of 2.5-3.5 percent, but in its latest forecast the bank expects inflation this year to rise to 2.3 percent and then to 2.8 percent in 2015.
In the first half of this year inflation is expected to remain below the bank's target range but then rise in the second half.
In January, Korea's headline inflation rate was steady at 1.1 percent from December.
The BOK said Korean stock prices had recently rebounded and the won appreciated, reversing a depreciation of the won and lower stock prices due to the instability of international financial markets and outflows of foreigners' stock investment funds.
Against the U.S. dollar, the won depreciated in the first half of 2013 before rebounding in the second half to end the year only 0.7 percent firmer. Since the start of the year, the won has eased 0.6 percent, trading at 1062.4 to the dollar today.
Against the Japanese yen, the won has been rising since October 2011 when it hit a low of 15.6 and declined to 10 to the yen around the end of 2013, a rise of almost 36 percent. Since the start of this year, the won has eased slightly but was still trading at 10.36 today.
Last month the governor of the BOK, Kim Choongsoo said the rapid depreciation of the yen against the won over the last year has hurt the South Korean industries that compete directly with Japan - such as steel, autos, machinery and electrical appliances - and any further depreciation of the yen would cause widespread pain to South Korea's exporters.
However, he also ruled out a competitive devaluation of the won
South Korea holds rate, recovery continues, inflation low - Central Bank News
Armenia Central Bank cuts Interest rates 25 bps in the second week of February
11th February 2014
Armenia's central bank cut its rate by a further 25 basis points to 7.5 percent, its third rate cut since November, as inflation has declined faster than expected due to low economic activity and lower international food prices.
The Central Bank of Armenia (CBA) cut its rate by 50 basis points in November and then another 25 points in December, changing course after raising its rate in August by 50 basis points. In December the CBA said monetary policy would be weakened further in 2014.
Armenia's inflation fell to 5.5 percent in January from 5.56 percent in December, hitting the CBA's upper limit of its inflation target. The central bank targets inflation in a range of 5.5 percent to 2.5 percent around a midpoint of 4.0 percent.
The bank said its board believes that inflation will continue to decline over the next 12 months, hitting the lower border of its range by the third quarter, erasing the impact of higher energy prices in July. It does not expect any inflationary pressures from the external sector.
Economic growth remains low, the central bank said, although improving in the fourth quarter and should improve further on the back of the bank's rate cuts and an expected expansion of fiscal policy in the second half of this year and private investment.
Armenia's headline deficit is projected to rise to 2.3 percent of Gross Domestic Product in 2014 from less than 1.0 percent in 2013 and then ease to 2.0 percent in 2015.
In the third quarter of 2013, Armenia's GDP expanded by an annual 1.4 percent, up from 0.6 percent in the second quarter.
Last week the International Monetary Fund and Armenia agreed on an IMF credit of up to US$125 million.
Armenia cuts rate 25 bps on swift decline in inflation - Central Bank News
Armenia's central bank cut its rate by a further 25 basis points to 7.5 percent, its third rate cut since November, as inflation has declined faster than expected due to low economic activity and lower international food prices.
The Central Bank of Armenia (CBA) cut its rate by 50 basis points in November and then another 25 points in December, changing course after raising its rate in August by 50 basis points. In December the CBA said monetary policy would be weakened further in 2014.
Armenia's inflation fell to 5.5 percent in January from 5.56 percent in December, hitting the CBA's upper limit of its inflation target. The central bank targets inflation in a range of 5.5 percent to 2.5 percent around a midpoint of 4.0 percent.
The bank said its board believes that inflation will continue to decline over the next 12 months, hitting the lower border of its range by the third quarter, erasing the impact of higher energy prices in July. It does not expect any inflationary pressures from the external sector.
Economic growth remains low, the central bank said, although improving in the fourth quarter and should improve further on the back of the bank's rate cuts and an expected expansion of fiscal policy in the second half of this year and private investment.
Armenia's headline deficit is projected to rise to 2.3 percent of Gross Domestic Product in 2014 from less than 1.0 percent in 2013 and then ease to 2.0 percent in 2015.
In the third quarter of 2013, Armenia's GDP expanded by an annual 1.4 percent, up from 0.6 percent in the second quarter.
Last week the International Monetary Fund and Armenia agreed on an IMF credit of up to US$125 million.
Armenia cuts rate 25 bps on swift decline in inflation - Central Bank News
Wednesday, 22 January 2014
South Korea Central Bank holds Interest rate steady, sees recovery, higher inflation
8th January 2014
South Korea's central bank held its base rate steady at 2.5 percent, as expected, and maintained its recent view that the country's economic recovery is continuing in line with its growth trend while exports and consumption have continued to improve.
The Bank of Korea (BOK), which cut its rate by 25 basis points in 2013, also said it expects inflation to gradually rise but remain low for the time being, largely due to stable international agricultural prices.
Korea's headline inflation rate eased to 1.1 percent in December from 1.2 percent in November for an average rate of 1.3 percent for 2013, down from 2.2 percent in 2012.
The BOK targets annual inflation of 2.5-3.5 percent and in October forecast 2013 inflation of 1.2 percent and 2.5 percent inflation in 2014.
Last month the BOK said it expects inflation to rise in 2014 as the domestic economy improves.
Korea's Gross Domestic Product rose by 1.1 percent in the third quarter from the second quarter for annual growth of 3.3 percent, up from a 2.3 percent growth rate in the second quarter and 1.5 percent in the first quarter.
"The Committee expects that the domestic economy will maintain a negative output gap for the time being going forward, although it forecasts that the gap will gradually narrow," the BOK said.
The central bank said the global economy will sustain its modest recovery going forward though it added that this could be affected by changes in global financial markets from the U.S. Federal Reserve's tapering of quantitative easing.
"Looking ahead, while paying close attention to developments in and the influences of external risk factors arising from shifts in major countries' monetary policies, the Committee will conduct monetary policy so as to keep consumer price inflation within the inflation target range over a medium-term horizon while supporting the continued recovery of economic growth," the BOK said.
Korea holds rate steady, sees recovery, higher inflation - Central Bank News
South Korea's central bank held its base rate steady at 2.5 percent, as expected, and maintained its recent view that the country's economic recovery is continuing in line with its growth trend while exports and consumption have continued to improve.
The Bank of Korea (BOK), which cut its rate by 25 basis points in 2013, also said it expects inflation to gradually rise but remain low for the time being, largely due to stable international agricultural prices.
Korea's headline inflation rate eased to 1.1 percent in December from 1.2 percent in November for an average rate of 1.3 percent for 2013, down from 2.2 percent in 2012.
The BOK targets annual inflation of 2.5-3.5 percent and in October forecast 2013 inflation of 1.2 percent and 2.5 percent inflation in 2014.
Last month the BOK said it expects inflation to rise in 2014 as the domestic economy improves.
Korea's Gross Domestic Product rose by 1.1 percent in the third quarter from the second quarter for annual growth of 3.3 percent, up from a 2.3 percent growth rate in the second quarter and 1.5 percent in the first quarter.
"The Committee expects that the domestic economy will maintain a negative output gap for the time being going forward, although it forecasts that the gap will gradually narrow," the BOK said.
The central bank said the global economy will sustain its modest recovery going forward though it added that this could be affected by changes in global financial markets from the U.S. Federal Reserve's tapering of quantitative easing.
"Looking ahead, while paying close attention to developments in and the influences of external risk factors arising from shifts in major countries' monetary policies, the Committee will conduct monetary policy so as to keep consumer price inflation within the inflation target range over a medium-term horizon while supporting the continued recovery of economic growth," the BOK said.
Korea holds rate steady, sees recovery, higher inflation - Central Bank News
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