Filtered by Topic: Monetary Policy Use setting Monetary Policy
BI has more work to do Bank Indonesia today raised its main policy rate by 50bp (to 4.75%), and further rate hikes are likely in the near term as the central bank looks to support the currency and clamp down on inflation. A rate hike today was always …
20th October 2022
Strong inflation will prompt further rapid hikes The much stronger than expected rise in consumer prices in Q3 will encourage the Reserve Bank of New Zealand to hike rates by another 50bp at its November meeting and poses upside risks to our view that it …
17th October 2022
Fed remains in hawkish mood for now While the minutes provided some hints that Fed officials are beginning to lay the ground for a slower pace of rate hikes eventually, the overall tone was still hawkish, suggesting that the Fed will push ahead with …
12th October 2022
The rise in headline consumer price inflation in September to further above the RBI’s 2-6% target range challenges our view that the RBI will slow the pace of tightening. But with food and energy inflation now set to lastingly drop back and growth likely …
BoK hikes rates again, but tightening cycle drawing to a close The decision by the Bank of Korea to raise its policy rate by a further 50bp (to 3.0%) suggests the central bank’s near-term focus will remain on combating inflation. But with growth set to …
No sign of FX sales, but PBOC pushing back in other ways The decline in China’s foreign exchange reserves appears to be due to valuation effects rather than direct intervention in the FX market. But we still think the PBOC will try, and may well succeed, …
7th October 2022
Account shows hawks still ruling the roost The account of the September ECB meeting confirms that there was a strong consensus in favour of rapid policy normalisation. Since the September meeting, inflation has again increased more than expected, …
6th October 2022
NBP now looking through the inflation figures Poland’s central bank (NBP) left interest rates unchanged at 6.75% today, which is a big surprise after data released last week showed a larger-than-expected rise in inflation in September. The accompanying …
5th October 2022
NBR still has a bit more work to do The National Bank of Romania (NBR) hiked its policy rate by 75bp, to 6.25%, at its meeting today. The tightening cycle is likely to slow down but we still expect rates to reach 7.00%, which is slightly higher than most …
RBNZ will hike all the way to 4.5% The Reserve Bank of New Zealand hiked the overnight cash rate by 50bp to 3.5% as widely anticipated and the hawkish tone of the statement is consistent with our forecast that rates will peak at 4.5% by mid-2023. For a …
Rates may peak at 3.6% by early-2023 The Reserve Bank of Australia slowed the pace of monetary tightening by delivering a smaller 25bp rate hike this month, but we still expect rates to peak a touch higher than most anticipate. The Bank’s decision to slow …
4th October 2022
RBI continues to frontload tightening The RBI hiked the repo rate by 50bp for the third meeting in a row today, taking it to 5.90%. Further rate hikes are likely over the coming months but, with inflation set to slow, we think the central bank will now …
30th September 2022
Rate cuts on the horizon The Czech National Bank (CNB) left its policy rate on hold, at 7.00%, for a second consecutive meeting today. With inflation unlikely to rise much further and the economy on the verge of recession, we think interest rates will …
29th September 2022
Mini-budget forces BoE to step in to prevent financial crisis The continued fallout this morning from the Chancellor’s mini-budget has forced the Bank of England to step in to avoid the early stages of a financial crisis. It has postponed its plan to sell …
28th September 2022
Thailand: central bank may need to accelerate the pace of tightening The Bank of Thailand hiked interest rates today by 25bp (to 1.0%), but with inflation elevated and the currency coming under further downward pressure, we think the central bank will …
Govt and BoE do the bare minimum, markets may yet force the issue It remains to be seen whether today’s statement by the government and the Bank of England will be enough to ease the markets’ fears about the government’s fiscal policy. The initial …
26th September 2022
BoE needs to get on front foot with big rate hike The further fall in the pound in early trading means that we’ve now reached the point where the Bank of England needs to step in in order to regain the initiative. There are a couple of ways it could do …
Govt’s fiscal plans to force the Bank to raise rates to 4.00% The 50 basis point (bps) rise in interest rates today was partly driven by the government’s extraordinary fiscal plans that are expected to be confirmed in a not-so-mini-budget tomorrow. It’s …
22nd September 2022
CBRT bows to political pressure with another 100bp cut Turkey’s central bank continued to bow to President Erdogan’s wishes today as it delivered another 100bp interest rate cut, to 12.00%, even though inflation breached 80% y/y in August. Further cuts …
Further tightening to be gradual Taiwan’s central bank (CBC) today raised its main policy rate by 12.5bp (to 1.625%), and with inflation easing and growth set to struggle, further tightening is likely to be gradual. Today’s move came as little surprise …
More tightening to come Even after today’s widely-expected 50bp rate increase by the Norges Bank, taking the policy rate to a 10-year high of 2.25%, the Bank has not finished tightening yet. The policy statement accompanying the rate hike said that “the …
New interest rate forecasts for Indonesia Bank Indonesia (BI) today raised interest rates by a further 50bp (to 4.25%) and signalled that further tightening was likely as it aims to clamp down on rising inflation. While a rate hike today was never in …
SNB adds to the crop of bumper rate rises The Swiss National Bank continued its tightening cycle today, delivering a 75bp rate hike as we expected. Further rate rises are likely at the next couple of meetings, but we think that investors have got ahead of …
Further hikes likely in the near term, but tightening cycle to be over by end-2022 The central bank of the Philippines (BSP) today raised its main policy rate by a further 50bp (to 4.25%), and signalled that further hikes were likely in the near term. The …
Bank of Japan won’t tighten even as inflation rises well above target The Bank of Japan kept policy loose and retained its easing bias today and we think it won’t tighten policy even as underlying inflation reaches its 2% target. As widely anticipated, …
A hawkish 75bp hike The Fed may have stuck to the script by delivering a 75bp rate hike at its September meeting, but it still managed to deliver a hawkish message with the accompanying projections, which imply an additional 75bp hike in November and a …
21st September 2022
Easing cycle entering a slower phase The decision by Russia’s central bank to cut the policy rate by a smaller 50bp, to 7.50%, confirms that, having already lowered rates sharply since April, the easing cycle is entering a slower phase. The decision was …
16th September 2022
Further tightening to be “measured and gradual” Malaysia’s central bank (BNM) today raised its main policy rate by 25bp (to 2.5%), and with inflation likely to remain elevated, further hikes are likely. Today’s move came as little surprise and was …
8th September 2022
Bank gives little away as it hikes by 75 bp The Bank of Canada remains concerned about the risk of high inflation expectations becoming entrenched but, with the economy now slowing sharply and inflation easing by more than the Bank expected, we still …
7th September 2022
RBA will slow pace of tightening before long While the RBA hiked rates by 50bp today as widely anticipated, it dropped some hints that further tightening will be less aggressive. The Bank’s decision to hike the cash rate by 50bp was correctly anticipated …
6th September 2022
MNB firmly focused on inflation and the forint Hungary’s central bank (MNB) continued with its aggressive tightening cycle today as it raised its base rate by another 100bp, to 11.75%. It’s clear that the MNB is struggling to contain very strong and …
30th August 2022
BoK hikes rates, tightening cycle to finish by year-end The Bank of Korea today raised its main policy rate by 25bp (to 2.5%), and further hikes are likely over the next few months. However, with economic growth set to slow in the second half of the year …
25th August 2022
Bank will tighten policy further Bank Indonesia (BI) hiked interest rates by 25bp to 3.75% today, and the hawkish commentary from the press conference suggests that the Bank will tighten policy further over the coming months. Today’s decision came as a …
23rd August 2022
PBOC extends lifeline to struggling economy Today’s reductions to both the one-year and five-year Loan Prime Rates (LPR) continue the PBOC’s efforts to support the faltering economy. We expect additional easing to follow in the coming months, but …
22nd August 2022
Abdalla begins with a hold as pressures mount on pound The Central Bank of Egypt (CBE) kept interest rates on hold, at 11.25%, in the first meeting under new caretaker governor Hassan Abdalla but, with pressure mounting on the pound, we still think …
18th August 2022
