Filtered by Topic: Monetary Policy Use setting Monetary Policy
Rates on hold throughout this year Romania’s central bank (NBR) kept its main policy rate unchanged at 7.00% today and we think it will keep rates on hold throughout this year. The central bank is likely to be the last in the region to transition to …
5th July 2023
Tightening cycle not over yet The RBA’s decision to keep rates unchanged today suggests that interest rates may not rise all the way to 4.85% as we currently expect, but further tightening still seems likely. Today’s decision was a very close call: 15 …
4th July 2023
June inflation figures will keep ECB hawkish The increase in German headline and core inflation in June was mainly due to base effects. Euro-zone headline inflation probably still fell but the core rate is likely to have been little changed which will be …
29th June 2023
Improvement in core inflation not enough to appease ECB The drop in Italy’s headline and core inflation in June is encouraging. But the euro-zone core rate is unlikely to have declined significantly due to base effects related to the anniversary of the …
28th June 2023
Slowdown in inflation not fast enough to prevent further rate hikes The sharp fall in inflation in May raises the risk that Reserve Bank of Australia will not raise any further at the upcoming meeting in July, but we still think that mounting upside risks …
This page has been updated with additional analysis since first publication . Easing cycle to kick off in August The fall in Brazilian inflation to just 3.4% y/y in the first half of this month, coupled with the surprisingly dovish tilt on Copom shown in …
27th June 2023
This webpage has been updated with a table and chart of key data. Falling inflation to keep Banxico on hold later today The further decline in Mexico’s headline inflation to 5.2% y/y in the first half of June will comfort policymakers at Banxico and …
22nd June 2023
50bps and at least another 25bps hike to come The Bank of England’s decision to raise rates by 50bps, from 4.50% to a near 15-year high of 5.00%, is unlikely to be the last hike given the UK’s higher and longer lasting inflation problem. We think the …
CBRT underwhelms with rate hike, but communications provide room for hope The 650bp interest rate hike by Turkey’s central bank today (to 15.0%) will underwhelm investors that wanted a faster and more aggressive monetary tightening. But the communications …
Norges Bank steps up the pace of rate hikes, more to come Today’s 50bp rate hike by the Norges Bank, taking its policy rate to 3.75%, won’t be the end of its tightening cycle. We already expected the policy rate to hit 4%, above the consensus forecast, …
SNB hikes by 25bp and signals more to come The 25bp rate hike announced by the SNB this morning was in line with market expectations but less than the 50bp we had predicted. However, the accompanying statement and upward revision to inflation forecasts …
With inflation back to target, rate cuts likely to come soon Bank Indonesia’s (BI) decision to keep interest rates unchanged today at 5.75% came as no surprise and was correctly predicted by all 34 analysts polled by Reuters. With the economy struggling …
Philippines Monetary Policy Meeting (June) Tightening cycle at an end, rate cuts early next year The central bank in the Philippines today left interest rates unchanged (at 6.25%) for a second consecutive meeting. While it gave no clear guidance over its …
This page has been updated with additional analysis since the post-meeting statement and press conference. Hawkish CNB will turn dovish by year-end The Czech National Bank (CNB) left its main policy rate on hold again today, at 7.00%, and the hawkish …
21st June 2023
This page has been updated with additional analysis since first publication. MNB leading the EM cutting cycle Hungary’s central bank (MNB) announced a cut to its one-day quick deposit rate (the key policy rate at the moment) by 100bp, to 16.00%, today. We …
20th June 2023
RBA will keep hiking to 4.85% The minutes of the RBA’s June meeting largely reaffirmed the Bank’s pivot to a more hawkish stance. To be sure, the Board did discuss the option of leaving rates unchanged, given the ongoing fall in households’ real …
More inaction to come As was widely expected, the Bank of Japan didn’t make any policy changes to either the short-term policy rate or Yield Curve Control (YCC) at Governor Ueda’s second meeting today. There was also no change to the Bank’s less upbeat …
16th June 2023
ECB hikes and signals more to come The ECB raised interest rates by 25bp today, as expected, and the press release implies that we can expect at least one further hike in July. We might get a bit more colour in the press conference, but whatever hints we …
15th June 2023
Stage set for rate cuts later in the year Taiwan’s central bank (CBC) today kept its main policy rate unchanged (at 1.875%), but with the economy struggling and price pressures set to ease further, we expect the central bank to start cutting interest …
Fed pauses as expected but, in hawkish move, eyes 50bp in additional rate hikes As expected, the Fed held its policy rate unchanged at between 5.00% and 5.25% today, but it made clear in the accompanying statement that pause was only to allow officials to …
14th June 2023
This report was first published in response to the PBOC’s cut to its 7-day reverse repo rate. It has since been updated to reflect subsequent developments. 13th June: Additional analysis and charts added. 15th June: Coverage of MLF cut added. 20th June: …
13th June 2023
CBR turns its hawkish rhetoric up a notch Russia’s central bank left rates on hold at 7.50% as expected today, but delivered an even more hawkish message as it said that pro-inflation risks have increased further and that it will consider the need to hike …
9th June 2023
Inflation drops, but rate cuts still some time away Headline inflation in Mexico dropped to a 21-month low of 5.8% y/y in May and will continue to decline over the coming months. That said, the strong labour market and rapid wage growth mean that …
8th June 2023
RBI could be laying groundwork for cuts before long The RBI’s decision to keep the repo rate on hold (at 6.50%) today comes as no surprise given the recent sharp drop in inflation. The door remains ajar for further hikes but with headline inflation set to …
Bank resumes rate hikes and probably another to come in July The Bank of Canada’s 25bp interest rate hike today is unlikely to be the last, with the rapid turnaround in the housing market and concerning underlying inflation dynamics raising the case for …
7th June 2023
This webpage has been updated with a table and chart of key data Inflation hits multi-year low, but rate cuts still some way off The fall in Brazilian inflation to 3.9% y/y in May, alongside the government’s new fiscal framework, has strengthened the …
NBP remains on pause The National Bank of Poland (NBP) left its main policy rate on hold again today, at 6.75%, and we think that rates will remain unchanged for at least the next few meetings. While we maintain our forecast that interest rates will be …
6th June 2023
Further tightening unlikely The Bank of Thailand (BoT) raised its policy rate by 25bps, to 2.0%, today but given the relatively benign outlook for inflation we think this marks the end of the tightening cycle. In the accompanying statement to today’s …
31st May 2023
This webpage has been updated with a table and chart of key data Inflation shows broader signs of easing The surprise fall in Brazilian inflation to 4.1% y/y in the first half of May, coming alongside this week’s approval of the new fiscal framework in …
25th May 2023
Hopes for CBRT rate hikes are evaporating Turkey’s central bank (CBRT) left its key policy rate on hold at 8.50% again today and, with Recep Tayyip Erdoğan in pole position to be re-elected as Turkey’s President this Sunday, the probability of much-needed …
Falling inflation to open the door for early rate cut Bank Indonesia (BI) kept its main policy rate unchanged today (at 5.75%) as was widely expected. With inflation falling and growth easing, we think there is a good chance the central bank could cut …
On hold again, first cut likely in August The Bank of Korea today left interest rates unchanged (3.5%) for a third consecutive meeting, but we don’t think it will be long before the central bank starts cutting interest rates. With inflation falling …
Some officials looking to resume rate hikes The minutes of the early May FOMC meeting reveal that although Fed officials agreed “the extent to which additional increases in the target range may be appropriate after this meeting had become less certain”, …
24th May 2023
Monetary policy to be kept tight despite falls in inflation Mexico’s headline inflation rate fell to a 20-month low of 6.0%y/y in the first half of May and is set to drop further over the coming months. That said, strong wage growth will keep inflation …
This webpage has been updated with a table and chart of key data. Rising core inflation to keep policymakers in hawkish mood South Africa’s headline inflation rate dropped back to 6.8% y/y in April but the further strengthening of core inflation will …
RBNZ signals tightening cycle is at an end The RBNZ slowed the pace of tightening this month, while signalling that its tightening cycle was at a close. The Bank’s decision to hike its official cash rate by 25bp, to 5.50%, was correctly predicted by 20 …
MNB inching closer to an easing cycle Hungary’s central bank (MNB) left its base rate on hold at 13% as expected today and the post-meeting communications are likely to provide guidance on when the overnight daily deposit rate of 18% will be cut, which …
23rd May 2023
Tightening cycle at an end The central bank in the Philippines today left interest rates unchanged (at 6.25%) but stated it was ready to resume its tightening cycle later in the year. However, with inflation falling back and headwinds to the economy …
18th May 2023
RBA retains its tightening bias The minutes of the RBA’s May meeting were on the hawkish side, but we still think that the Bank’s tightening cycle is already over. Although the Board discussed the option of leaving the cash rate unchanged, it ultimately …
16th May 2023
Disinflation process largely on track, rate cuts in 2024 Romania’s central bank (NBR) left its policy rate on hold as expected today, at 7.00%, and we think that it will keep policy rates unchanged throughout this year. Interest rate cuts are likely to …
10th May 2023
Fed’s focus will turn to policy loosening before long The Fed’s new policy statement provides the clearest hint yet that the 25bp rate hike today is likely to be the last. We expect economic weakness and a sharper-than-expected drop back in core inflation …
3rd May 2023
CNB still on pause, but cuts not far away The Czech National Bank (CNB) left its main policy rate on hold again today, at 7.00%, but we think that interest rate cuts are not far away, with policymakers likely to kickstart the loosening cycle in September. …
Surprise hike, but no more tightening in 2023 Malaysia’s central bank (BNM) unexpectedly raised its main policy rate today by 25bps (to 3.0%), citing the resilient economy as grounds to “further normalise the degree of monetary accommodation”. However, …
Tight labour market raises the risk of outsized RBNZ hike The strength of New Zealand’s labour market last quarter poses upside risks to our view that the RBNZ will lift rates by 25bp later this month. The 0.8% q/q rise in employment in Q1 was stronger …
Tightening cycle over but rates will only be lowered in Q2 2024 The Reserve Bank of Australia retained its tightening bias when it lifted the cash rate by 25bp at today’s meeting, but we suspect that it won’t raise interest rates any further over the …
2nd May 2023
Inflation figures suggest 50bp ECB hike next week still likely National inflation figures released today suggest that euro-zone headline and core inflation edged up in April. That adds to the reasons for the ECB to opt for a 50bp hike at its meeting next …
28th April 2023
CBR keeps rates on hold, hike still on the table Russia’s central bank maintained its hawkish tone today as it left interest rates unchanged at 7.50% and continued to emphasise pro-inflation risks in the economy. So far these risks do not seem to be …
Yield Curve Control here to stay for now The B ank of Japan predicted that inflation will fall well below its 2% target in FY2025 when it kept policy settings unchanged today. And while it pledged to conduct a review into the Bank’s policy measures, the …
Calm before the storm? Turkey’s central bank (CBRT) left its key policy rate on hold at 8.50% again today, but all eyes are now firmly on next month’s election for a possible change in the stance of monetary policy. Polls are close, but an opposition …
27th April 2023
Inflation will only return to target in H2 2024 While inflation is moderating slightly faster than the RBA had anticipated, price gains remain far too strong to be consistent with the Bank’s 2-3% inflation and we’re sticking to our forecast of a final …
26th April 2023
