Filtered by Topic: Monetary Policy Use setting Monetary Policy
NBR’s slows tightening again, likely the end of the cycle The 25bp interest rate hike by Romania’s central bank today, to 7.00%, probably brings the hiking cycle to an end. Today’s decision was expected by all analysts, including ourselves. The central …
10th January 2023
This report has been updated with additional table and chart of key data. Inflation surges higher on back of weaker pound Egypt’s CPI inflation rate jumped from 18.7% y/y in November to 21.3% y/y in December, its fastest pace since the end of 2017. (See …
Rates on hold, but cuts still some way off Poland’s central bank (NBP) left interest rates unchanged at 6.75% again today. We expect the next move by the NBP will be an interest rate cut , although that is only likely to arrive towards the end of 2023. …
4th January 2023
CBE acts aggressively to counter inflation surge and weaker pound The 300bp interest rate hike by the Egyptian Central Bank (CBE), which took the overnight deposit rate to 16.25%, suggests that policymakers are even more concerned about rising inflation …
22nd December 2022
CBRT on hold … for now Turkey’s central bank (CBRT) stuck to its previous guidance today and left its policy rate on hold, at 9.00%, but there is clearly a risk that President Erdogan forces the CBRT to restart its easing cycle, particularly with the 2023 …
Bank Indonesia slows pace of tightening, but further hikes are likely Bank Indonesia (BI) today raised interest rates for a fifth consecutive meeting but slowed the pace of tightening by raising interest rates by just 25bps (to 5.50%) from 50bp at its …
Rate cuts to arrive in mid-2023 The Czech National Bank (CNB) left its policy rate on hold, at 7.00%, as expected again today and, with inflation set to drop sharply from Q1, we think the CNB will be one of the first EM central banks to cut rates next …
21st December 2022
MNB staying the course as inflation pressures persist Hungary’s central bank (MNB) left its base rate on hold again at 13.00% and is likely to use its communications later today to reaffirm its commitment to its market stabilisation tools to defend the …
20th December 2022
Bank won’t follow band widening with rate hikes The Bank of Japan today widened the tolerance band around its yield target but we don’t expect it to hike its short-term policy rate anytime soon. The Bank’s decision to keep its short-term policy rate at …
CBR now set for extended pause Russia’s central bank kept its main policy rate unchanged at 7.50% today as it emphasised that inflation risks have become slightly more skewed to the upside. This reinforces our view that the easing cycle is unlikely to …
16th December 2022
Banxico delivers smaller 50bp dose of tightening, end of cycle close Mexico’s central bank slowed down the pace of tightening with a 50bp interest rate hike, to 10.50%, today and the accompanying statement made clear that the tightening cycle will soon …
15th December 2022
More ECB rate hikes to come Today’s 50bp rate hike came alongside hawkish comments which are consistent with our view that the deposit rate will peak at 3%, significantly higher than the consensus forecast and a touch above what was priced into the …
Easing off the brakes, but hikes may not halt until rates hit 4.50% The Bank of England followed the Fed by slowing the pace of interest rate hikes from 75bps in November to a 50bps hike today as widely expected, which took rates from 3.00% to 3.50%. But …
SNB hikes by 50bp, hints at more to come The SNB’s 50bp rate hike, to 1.00%, was in line with expectations but, more importantly, the Bank also raised its medium-term inflation forecast slightly, hinting that policymakers believe future hikes may be …
Norges Bank tightening nearly over, but pivot a long way off Today’s 25bp rate increase by the Norges Bank, to 2.75%, takes it very close to the end of its tightening cycle. But we think the Bank is a long way from pivoting to loosening policy. The …
End of the tightening cycle Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bps (to 1.75%) but with inflation easing and growth set to struggle we expect this hike to have marked an end to the tightening cycle. Today’s decision was in …
Tightening cycle nearing an end The central bank in the Philippines (BSP) today raised its main policy rate by a further 50bps (to 5.50%), but with Governor Felipe Medalla sounding more dovish than expected on inflation, we think the tightening cycle will …
The Fed strikes back Despite the increasingly compelling evidence that core inflation will fall sharply next year, the Fed simply doubled down on its recent hawkishness. As expected, the Fed issued an identical statement and raised interest rates by a …
14th December 2022
This page has been updated with additional analysis, chart, and table of key figures. Jump in inflation a sign of things to come; tightening still on the agenda Egypt’s CPI inflation rate jumped from 16.2% y/y in October to 18.7% y/y in November – its …
8th December 2022
Slowing growth keeps the NBP on hold Poland’s central bank (NBP) stuck to its script today as it left interest rates on hold at 6.75% for the third consecutive meeting. With inflation nearing a peak and the economy slowing, we think the tightening cycle …
7th December 2022
The end of the tightening cycle? The Bank of Canada delivered a somewhat dovish 50 bp policy rate hike today by softening its explicit forward guidance that interest rates will need to rise further. We would not rule out a final 25 bp interest rate hike …
RBI slows the pace of tightening The RBI slowed the pace of monetary tightening with a 35bp hike to the repo rate (to 6.25%) and, with headline inflation set to ease further and growth entering a softer patch, we think the central bank will call a halt to …
RBA not backing away from rate hikes just yet The RBA today hiked the cash rate by 25bp as widely anticipated and while the statement was marginally less hawkish, we’re sticking to our view that the Bank will lift rates to 3.85% by April. The Bank’s …
6th December 2022
Thailand: gradual tightening cycle to continue The Bank of Thailand hiked interest rates today by a further 25bps (to 1.25%), and reiterated that it is likely to continue to tighten policy gradually over the coming months. The decision was correctly …
30th November 2022
Higher interest rates are weighing on credit and attracting savings October’s money and credit figures reveal further signs that households continue to remain cautious and higher interest rates are starting to weigh on the economy. The £0.8bn rise in …
29th November 2022
ECB account gives little away on next steps There are no significant clues in the account of the ECB’s October meeting about the pace and extent to which the Bank will raise interest rates in December and next year. A 50bp hike seems most likely next …
24th November 2022
CBRT final act? Turkey’s central bank (CBRT) delivered another 150bp interest rate cut, to 9.00%, at today’s meeting and suggested that this marked the end of the easing cycle. We’ll take the CBRT for its word but there is clearly a risk that President …
Tightening cycle not yet finished This morning’s 75bp increase in the Riksbank’s policy rate was in line with the consensus and market expectations while the press statement is consistent with our view that policymakers will raise rates to a peak of …
The Bank of Korea today raised interest rates by a further 25bps (to 3.25%), but with growth slowing and inflation easing, we think there is a good chance this marks the end of the central bank’s tightening cycle. Today’s decision came as little surprise …
How many is “various”? The minutes of the Fed’s early-November policy meeting suggest that although most officials were in favour of slowing the pace of rate hikes at upcoming meetings, there was no consensus on how high the peak in rates would ultimately …
23rd November 2022
RBNZ will hike rates above 5.0% The Reserve Bank of New Zealand hiked the overnight cash rate by 75bp as most had anticipated and it now seems likely that rates will peak closer to 5.5% instead of our current forecast of 5.0%. The statement was very …
MNB hasn’t won its inflation battle yet Hungary’s central bank (MNB) left its base rate on hold today, at 13.00%, for a second consecutive meeting and reaffirmed that it would continue to use its “market stabilisation” tools to defend the forint. With …
22nd November 2022
More hikes coming in Indonesia Bank Indonesia (BI) today raised interest rates by a further 50bps (to 5.25%) and we think further hikes are likely as the central bank looks to support the rupiah and clamp down on inflation. While a rate hike today was …
17th November 2022
Further hikes likely in the near term, but tightening cycle to be over by early next year The central bank of the Philippines (BSP) today raised its main policy rate by a further 75bps (to 5.0%), and we think further tightening is likely in the near term. …
Another 75bp hike, but end of tightening cycle on the horizon Mexico’s central bank delivered a fourth consecutive 75bp interest rate hike, to 10.00%, today but, with inflation now past its peak and the economy likely to slow sharply over the coming …
10th November 2022
Doves take control at the NBP Poland’s central bank (NBP) announced (very late by its usual standards) that it had left interest rates unchanged at 6.75% at today’s MPC meeting, confirming previous comments from policymakers that they believe the current …
9th November 2022
NBR’s tightening cycle nearing an end The National Bank of Romania (NBR) slowed down the pace of its tightening cycle today, with a 50bp interest rate hike to 6.75%. We think that the tightening cycle is nearing an end, but that interest rates will have …
8th November 2022
Dovish CNB unlikely to tighten further The Czech National Bank (CNB) left its policy rate on hold, at 7.00%, for a third consecutive meeting today. With inflation nearing a peak and the economy now contracting, we think rates will be left unchanged over …
3rd November 2022
Dovish tilt, but rates may still rise to 5.00% Although the Monetary Policy Committee (MPC) raised interest rates today by 75bps, from 2.25% to a 14-year high of 3.00% (consensus 3.00%), it sent a strong signal that it is unlikely to raise rates to the …
BNM closing in on the finish line Malaysia’s central bank (BNM) raised its main policy rate by 25bp (to 2.75%) today, but with inflation falling and growth set to slow, we think the tightening cycle is nearing an end. Today’s move came as little surprise …
Labour market strength will encourage RBNZ to hike by 75bp this month New Zealand’s labour market remained very tight last quarter and coupled with the continued strength in inflation. the RBNZ will probably hike by 75bp in a couple of weeks. The 1.3% q/q …
1st November 2022
RBA will lift rates more sharply than most anticipate The Reserve Bank of Australia hiked rates by 25bp today and the upward revision to its inflation forecasts are consistent with our view that rates will peak at an above-consensus 3.85%. The Bank’s …
CBR brings its easing cycle to a halt Russia’s central bank left interest rates on hold at 7.00% today and highlighted the pro-inflationary risks stemming from the recent mobilisation of reservists. That said, we think this is likely to mark a pause in …
28th October 2022
Window for tighter policy is closing The Bank of Japan revised up its medium-term inflation forecasts while keeping policy unchanged today, but we still think that it won’t snuff out the budding virtuous cycle between prices and wages. As widely …
ECB’s work is far from done The ECB is very likely to follow today’s 75bp rate hike with further aggressive increases in the coming months, even if we are right that the forthcoming recession will be deeper than most expect. The decision to maintain the …
27th October 2022
Egypt’s central bank has just announced that it is shifting to a more flexible exchange rate regime, which we think will result in the pound falling 18% to 24/$ by end-2023 if not sooner. The move will result in some short-term economic pain but it will …
Bank slows pace of tightening despite ongoing inflation concerns Today’s smaller 50 bp interest rate hike, which took the overnight rate to 3.75%, suggests that the Bank of Canada is growing confident that its actions so far will be enough to vanquish …
26th October 2022
MNB to keep relying on unconventional tools to support the forint Hungary’s central bank (MNB) left its base rate on hold today and we expect that the central bank will continue to use its new “market stabilisation tools” to keep short-term interest rates …
25th October 2022
CBRT inches further into the unknown Turkey’s central bank stepped up its easing cycle with a 150bp interest rate cut (to 10.50%) today but hinted that the easing cycle will end next month. Even so, policymaking is stretching further into the unknown and …
20th October 2022
