Three Central Banks Tighten

June 25th, 2014
in econ_news

Monetary Policy Week in Review, 16-20 June 2014

by Peter Nielsen, Central Bank News

Last week in global monetary policy Colombia, Namibia and the Philippines tightened their policy stance while minutes from the Bank of England were viewed as hawkish and the U.S. Federal Reserve continued to rein back on its asset purchases.

Nevertheless, central banks appear remain cautious and reluctant to raise benchmark interest rates out of fear of torpedoing a global economy that is still considered vulnerable to a setback.

Follow up:

The global economy is at a delicate balancing point after the first half of 2014, with the expansionary forces not fully recovered after a stronger than expected winter chill in the first quarter and considerable geopolitical risks ranging from Iraq through Ukraine. Through the first 25 weeks of this year, central banks have now cut their policy rates 26 times while rates have been raised 22 times, illustrating the lack of synchronicity in the global economy.

The 90 central banks followed by Central Bank News have taken 237 policy decisions so far this year, of which 10.9 percent have favored rate cuts while 9.3 percent have favored rate rises.

But this year's global trend toward tighter monetary policy is unmistakable despite the recent easing by the European Central Bank (ECB) and the Bank of Japan's (BOJ) injection of liquidity.

The global monetary policy rate (GMPR), the average rate of 90 central banks, rose to 5.54 percent at the end of last week, up from 5.53 percent at the end of the first quarter and 5.41 percent at the end of 2013.LIST OF LAST WEEK'S CENTRAL BANK DECISIONS:

OTHER STORIES:

TABLE WITH LAST WEEK'S MONETARY POLICY DECISIONS:

COUNTRY MSCI NEW RATE OLD RATE 1 YEAR AGO
RUSSIA EM 7.50% 7.50% 8.25%
BOTSWANA 7.50% 7.50% 8.50%
MOROCCO FM 3.00% 3.00% 3.00%
SRI LANKA FM 6.50% 6.50% 7.00%
THAILAND EM 2.00% 2.00% 2.50%
UNITED STATES DM 0.25% 0.25% 0.25%
GEORGIA 4.00% 4.00% 4.00%
NAMIBIA 5.75% 5.50% 5.50%
PHILIPPINES EM 3.50% 3.50% 3.50%
SWITZERLAND DM 0.25% 0.25% 0.25%
NORWAY DM 1.50% 1.50% 1.50%
COLOMBIA EM 4.00% 3.75% 3.25%

This week (Week 26) eight central banks will decide on monetary policy, comprising the countries of Angola, Israel, Armenia, Turkey, Hungary, Albania, Fiji and the Czech Republic. The Bank for International Settlements (BIS), known as the central bankers' bank, will be releasing its annual report on Sunday, June 29.

TABLE WITH THIS WEEK'S MONETARY POLICY DECISIONS:

COUNTRY MSCI DATE CURRENT RATE 1 YEAR AGO
ANGOLA 23-Jun 9.25% 10.00%
ISRAEL DM 23-Jun 0.75% 1.25%
ARMENIA 24-Jun 7.25% 8.00%
TURKEY EM 24-Jun 9.50% 4.50%
HUNGARY EM 24-Jun 2.40% 4.25%
ALBANIA 25-Jun 2.50% 3.75%
FIJI 26-Jun 0.50% 0.50%
CZECH REPUBLIC EM 26-Jun 0.05% 0.05%

www.CentralBankNews.info









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