Central Banks Maintain Rates Amidst Global Uncertainty

Monetary Policy Week in Review – Sep 15-19, 2014: 10

by Peter Nielsen, Central Bank News

Last week all 10 central banks that considered their monetary policy stance left rates unchanged, something that has only occurred once before this year.

Apart from last week, only week 15 – from April 7 to April 11 – saw all central banks maintain their rates, illustrating just how active monetary policy has become since the global financial crises. Between two and 15 monetary policy committees at central banks have deliberated their policy stance each and every week this year, with one to five central banks changing their rates.

But last week all 10 central banks maintained their rates, reflecting the renewed uncertainty over the direction of the global economy and the timing of a normalization of U.S. monetary policy.

Through the first 38 weeks of this year, the 90 central banks followed by Central Bank News have cut their policy rates 48 times, or 13.8 percent of all policy decisions, up from 12 percent at the end of the first half and 12 percent at the end of the first quarter.

Meanwhile, rates have been raised 36 times, or 10.2 percent of all policy decisions, up from 9.3 percent at the end of June and 8.7 percent at the end of March.

LIST OF LAST WEEK’S CENTRAL BANK DECISIONS:

• Mozambique maintains rate on low inflation
• Thailand holds rate, accommodative stance still needed
• Fed trims QE, still sees low rates for considerable time
• Ghana maintains rate, inflation seen peaking soon
• Swiss maintain franc cap, see higher deflation risk
• Norway holds rate, drops warning of possible rate cuts
• Malaysia maintains rate, but warns it may raise again
• South Africa maintains rate on improved inflation outlook
• Nigeria holds rate but worried over inflation, FX rate
• Pakistan holds rate, subsidy cut may hit inflation outlook

TABLE WITH LAST WEEK’S MONETARY POLICY DECISIONS:

This week (Week 38) 10 central banks are scheduled to decide on monetary policy: Israel, Armenia, Hungary, Morocco, Albania, Georgia, Turkey, Fiji, Czech Republic and Trinidad and Tobago.

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