Filtered by Topic: Monetary Policy Use setting Monetary Policy
Surprise hike, but cuts still likely in H2 In a surprise move, Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.875%), but with the economy struggling badly and inflationary pressures set to ease further, we think this was …
23rd March 2023
More tightening still to come The central bank of the Philippines (BSP) today slowed the pace of tightening as it raised its main policy rate by 25bps (to 6.25%), and hinted that the tightening cycle was now approaching an end. Although inflation has now …
Fed opts for dovish hike The 25bp rate hike and new projections unveiled by the Fed today were towards the more dovish end of potential outcomes – with officials acknowledging the likely economic hit from recent banking sector turmoil and leaving their …
22nd March 2023
Bank likely to be feeling more confident about inflation outlook The latest Summary of Deliberations reveals that the Bank of Canada is not overly concerned by signs of sticky core inflation elsewhere, but the Bank still needs to see more evidence of …
Reacceleration in inflation may force 25bps rate hike The reacceleration in overall CPI inflation from 10.1% in January to 10.4% in February (consensus 9.9%, BoE 10.2%) and core inflation from 5.8% to 6.2% (consensus 5.7%) may be enough to tilt the Bank …
RBA not done hiking yet The minutes of the RBA’s latest meeting confirm that the RBA is close to ending its tightening cycle, but we suspect that the strength of the latest labour force data will prompt it to deliver two more 25bp rate hikes. Contrary to …
21st March 2023
CBR keeps Q2 rate hike on the table The statement accompanying the Russian central bank’s (CBR’s) decision to keep its policy rate unchanged at 7.50% stuck to the hawkish script from February. While it didn’t confirm that an interest rate hike is on the …
17th March 2023
RRR cut not a major easing move The People’s Bank (PBOC) has just announced a cut to the required reserve ratio (RRR). This will provide a bit of financial relief for China’s large and medium-sized banks. It may also help nudge down lending rates …
ECB prioritises inflation fight The ECB’s decision to raise interest rates by 50bp today was the riskiest of the available options – we think investors would have understood if the Bank decided to pause. But the Bank has hinted that it could offer new …
16th March 2023
No more hikes this year Bank Indonesia (BI) kept its main policy rate unchanged today (at 5.75%), and signalled that further rate increases this year were unlikely. The rupiah has held up relatively well over the past week despite the turmoil in global …
RBNZ will cut rates by year-end as recession takes hold The -0.6% q/q contraction in production GDP was weaker than most had expected, but a tad stronger than our forecast (Refinitiv Consensus: -0.2%; CE: -1.5%). And crucially, it was much weaker than the …
15th March 2023
Just when financial markets appeared to be calming down after the SVB saga, the sell-off in European bank shares has resumed this morning due to concerns about the viability of Credit Suisse. At this stage, a huge amount is unclear, but a few points are …
Strong inflation data unlikely to outweigh financial stability concerns The 0.5% m/m rise in core consumer prices last month adds to the evidence that inflation remains stubbornly high, but the ongoing fallout from the SVB crisis over the coming days is …
14th March 2023
Credit growth benefiting from reopening boost Bank loan growth jumped to a 14-month high in February. And broad credit growth accelerated for the first time since September. This rebound should continue in the near-term thanks to a reopening revival in …
10th March 2023
BoJ still likely to end Yield Curve Control The Bank of Japan didn’t make any policy changes at Governor Kuroda’s last meeting today but we expect incoming Governor Ueda to abandon Yield Curve Control in April. We were among the few who expected the Bank …
This webpage has been updated with additional analysis, Chart and Table of key figures. Inflation continues to soar, tightening cycle to resume Egypt’s headline inflation rate jumped to 31.9% y/y in February, leaving it just shy of an all-time high and …
9th March 2023
Rates set to remain on hold in 2023 Malaysia’s central bank (BNM) left its main policy rate unchanged today (at 2.75%) and stated again that it would continue to take time to monitor the impact of past rate hikes before deciding if further tightening was …
Policy unchanged, but Bank leaves the door open to future hikes There were no surprises from the Bank of Canada today as it kept the policy rate unchanged at 4.5%, as it previously hinted it would, and reiterated that it is still prepared to resume …
8th March 2023
Rates on hold, door for rate cuts this year remains open Poland’s central bank (NBP) left its main policy rate on hold as expected again today, at 6.75%, and we don’t think the NBP will rule out further interest rate hikes just yet. But with inflation …
MNB to keep its base rate on hold as inflation threat persists Hungary’s central bank (MNB) left its benchmark base rate on hold again today (at 13.00%) and, with inflation likely to stay far above target for some time, we don’t expect the MNB to start …
28th February 2023
CBRT eases policy after earthquakes hit Turkey’s central bank (CBRT) lowered its key policy rate by 50bp, to 8.50%, today as policymakers sought to support the economy in the wake of the devastating earthquakes this month. Another rate cut in March looks …
23rd February 2023
Cuts coming sooner than consensus expects The Bank of Korea today left interest rates unchanged (3.5%), bringing an end to the country’s tightening cycle. With the economy struggling badly and inflationary pressures set to ease further over the coming …
Bank will lift rates to 5.25% The RBNZ slowed the pace of tightening this month and we suspect it will now only lift the overnight cash rate to 5.25% instead of our previous forecast of 5.5%. The Bank’s decision to slow the pace of tightening from the …
22nd February 2023
RBA isn’t done tightening just yet The minutes of the RBA’s February meeting, where policymakers lifted the cash rate by 25bp to 3.35%, confirmed the Bank’s pivot to a slightly more hawkish stance. In contrast to its December meeting, the Bank didn't …
21st February 2023
No more hikes this year Bank Indonesia (BI) kept its main policy rate unchanged today (at 5.75%), and signalled that further rate increases this year were unlikely. This supports our view that the tightening cycle has now come to an end. We expect the …
16th February 2023
More tightening still to come The central bank of the Philippines (BSP) today raised its main policy rate by a further 50bps (to 6.00%), and we think more tightening is likely in the near term amid worries about high inflation. The decision was in line …
Wage growth continues to accelerate despite cooling labour demand December’s labour market data showed that, despite an easing in labour demand, labour market conditions stayed tight and the market continues to support strong wage growth. The Bank of …
14th February 2023
CBR changes the script as inflation risks mount Russia’s central bank (CBR) left rates on hold at 7.50% today but its communications were far more hawkish than expected as it talked about a further build-up of inflation risks and the possibility of hiking …
10th February 2023
The nomination of Kazuo Ueda to lead the Bank of Japan could be read as a sign that the Kishida government is seeking a shift away from ultra-loose policy, but we aren’t fully convinced that this is the case. According to media reports, Japan’s government …
Banxico hikes by 50bp, and flags another increase Mexico’s central bank delivered a larger-than-expected 50bp interest rate hike, to 11.00%, today most probably because the recent uptick in services inflation spooked the Board. Another rate hike (probably …
9th February 2023
Tightening cycle over, but cuts unlikely until 2024 The National Bank of Romania (NBR) left its policy rate on hold today, at 7.00%, and we think that its tightening cycle is now over. Even so, interest rate cuts probably won’t arrive until 2024. Today’s …
Governor Thedéen steps on the brakes The Riksbank’s decision to raise its policy rate by 50bp today was expected but the decision to begin actively selling government bonds is a surprise. We now think the policy rate will rise a bit further in the coming …
Bank balancing risks of sticky services inflation and housing market The Summary of Deliberations reveals that the Bank of Canada is still concerned about the risk that inflation will not decline all the way back to the 2% target, but that it ultimately …
8th February 2023
Rates unchanged, rate cuts possible by year-end Poland’s central bank (NBP) kept its main policy rate on hold at 6.75% as expected today and, with the economy slowing and inflation near a peak, further hikes are unlikely. We expect the central bank to …
RBI’s tightening cycle is probably at an end The RBI further slowed the pace of monetary tightening with a 25bp hike to the repo rate (to 6.50%) today and, though it has left the door ajar for further rate hikes, the softer growth outlook and improvement …
RBA signals further interest rate hikes ahead The RBA raised interest rates by another 25bp and signalled that further tightening will be needed. We’re sticking to our forecast that the Bank will lift the cash rate to an above-consensus 3.85% by April. …
7th February 2023
Peak rate still some way off Whereas the Bank of England and (arguably) the Fed delivered dovish surprises over the past twenty four hours, we think the ECB’s statement does not amount to a clear change in the policy stance. The 50bp hike today was almost …
2nd February 2023
Dovish pivot coming soon The Czech National Bank (CNB) delivered no surprises in leaving its policy rate on hold again today, at 7.00%, but we maintain our view that it will cut interest rates a bit more quickly than most others expect. Our current …
Rates closing in on their peak, but rate cuts unlikely to come until 2024 While raising rates by 50bps today, from 3.50% to 4.00%, the Bank of England implied that rates are very close to their peak. We still think that rates may rise to 4.50%, but …
Bank hints that smaller 25 bp hike likely to be the last The Bank of Canada accompanied its smaller 25 bp hike with new guidance that it intends to hold the policy rate at the current 4.5% while it assesses the impact of the cumulative interest rate …
25th January 2023
More tightening still to come The Bank of Thailand hiked interest rates today by a further 25bps (to 1.50%), and hinted that the tightening cycle still has further to run. The decision was correctly predicted by 21 out of the 23 economists polled by …
Rates set to stay on hold in 2023 Sri Lanka’s central bank (CBSL) kept interest rates unchanged today and we expect it to leave rates on hold for the rest of the year as it aims to strike a fine balance between supporting a struggling economy and clamping …
Interest rate cuts still some way off Hungary’s central bank (MNB) left its base rate on hold today, at 13.00%, and we don’t think that it will cut its main policy interest rates until late-2023. In the meantime, we expect that the MNB will continue to …
24th January 2023
Further tightening on the cards Pakistan’s central bank (SBP) raised its policy rate today by a further 100bps (to 17.0%), and we expect more tightening over the coming months amid concerns about high inflation and the worsening external position. …
23rd January 2023
CBRT continues with policy pause Turkey’s central bank (CBRT) left its main policy rate unchanged at 9.00% as expected today and our central view is that rates will remain on hold in the coming months. But with inflation now falling sharply and the …
19th January 2023
Norges Bank tightening nearly over The Norges Bank eased off the brakes today by leaving policy on hold, but signalled that it will raise its policy rate at the next meeting in March. We suspect that will be the final hike in this tightening cycle, and …
Bank Indonesia tightening cycle at an end Bank Indonesia (BI) today raised interest rates by a further 25bps (to 5.75%) but also appeared to signal there would be no further rate increases this year. We are changing our forecast in response, and now …
Rates on hold, end of the tightening cycle Malaysia’s central bank (BNM) unexpectedly left its main policy rate unchanged today (at 2.75%), but appeared to leave open the possibility of further rate hikes later in the year. However, with growth set to …
New Governor will ditch Yield Curve Control in April The Bank of Japan kept policy settings unchanged today, but the increase in its medium-term inflation forecasts supports our view that Yield Curve Control will be abandoned once a new Governor takes …
18th January 2023
Final rate hike of the cycle The Bank of Korea today raised interest rates by a further 25bps (to 3.50%), but with price pressures easing and economic growth slowing sharply, we think this will be the last hike of the cycle. Today’s decision came as …
13th January 2023
