Filtered by Topic: Monetary Policy Use setting Monetary Policy
Easing cycle to begin around the middle of the year The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), but sounded a little more dovish than after previous meetings. With inflation likely to stay low and …
15th February 2024
This page has been updated with additional analysis since first publication. In the mildest of mild recessions, but recovery is in sight The news that the UK slipped into technical recession in 2023, will be a blow for the Prime Minister on a day when he …
Above-target inflation to keep NBR in a hawkish mood The National Bank of Romania (NBR) left its policy rate on hold at 7.00% again today and, while interest rate cuts are likely to start around mid-year, we think that monetary easing will be less …
13th February 2024
Weakness underlying headline strength There was the usual seasonal surge in net credit in China in January that took new bank lending to a record high. The underlying story is less positive, with loan demand little changed and broader credit growth slower …
9th February 2024
Mexican inflation drops, but Banxico to hold firm later today The jump in Mexico’s headline inflation rate to 4.9% in January means Banxico won’t feel comfortable enough yet to start an easing cycle at the Board meeting later today. Elsewhere, the further …
8th February 2024
Inflation continues to slow, but looming devaluation will keep it high Egypt’s headline inflation rate slowed for a fourth consecutive month, easing from 33.6% y/y in December to 29.9% y/y in January. We think inflation will continue to slow this year, …
Governor Karahan committed to tight policy, rate cuts some way off The communications from new Turkish central bank governor Karahan at today’s Inflation Report briefing will have helped to reassure investors that the change at the helm of the central …
RBI not ready to pivot yet The RBI kept the repo rate on hold at 6.50% today as expected and continued to strike a hawkish tone. With the economy holding up well and inflation to remain above the 4% target for a few more months yet, we doubt the central …
Rates on hold, March rate cut is in the balance The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we think that an interest rate cut at the next meeting in March looks finely balanced. Our current assumption is that …
7th February 2024
On hold, cuts likely around mid-2024 The Bank of Thailand (BoT) today resisted pressure from the government to cut interest rates to support the struggling economy. But with growth set to remain weak and inflationary pressures very subdued, we think the …
Surprise hike, tightening cycle may not be finished yet The Central Bank of Kenya delivered a surprise 50bp interest rate hike today, to 13.0%, suggesting that the MPC’s inflation fears are outweighing signs that exchange rate pressures are easing. With …
6th February 2024
RBA pours cold water on the prospect of early rate cuts Although we're sticking with our view that the RBA is done tightening policy, rate cuts may not be in play until the second half of this year. The RBA’s decision to leave its cash rate on hold at …
Cuts may come earlier than the BoE implies While leaving interest rates at 5.25% for the fourth meeting in a row today, the Bank of England sent some soft signals that the next move will be a cut, but it pushed back more strongly against the idea that …
1st February 2024
Riksbank on track for May rate cut The Rikbsank signalled in today’s policy statement that interest rates may be cut sooner than they previously anticipated, supporting our view that the first cut is likley to be in May. The decision to leave the key …
Fed drops its tightening bias The Fed left its key policy rate unchanged at 5.25% to 5.50% today, but dropped its tightening bias, keeping open the possibility of a rate cut at the next FOMC meeting in mid-March. Admittedly, the new policy statement warns …
31st January 2024
This page has been updated with additional analysis since first publication. With disinflation gathering pace, rate cuts are now in sight The weaker-than-expected Q4 inflation reading paves the way for the RBA to cut interest rates sooner than most are …
Bank of Ghana starts its easing cycle The Bank of Ghana kicked off its easing cycle with a 100bp cut, to 29.00%, today and an improving balance of payments position alongside further falls in inflation mean that more cuts are on the cards over the coming …
29th January 2024
MAS keeps policy unchanged but loosening likely in April. The Monetary Authority of Singapore (MAS) kept monetary policy settings unchanged today which was in line with expectations, but we think weaker incoming activity data and easing concerns about …
Fall in inflation keeps another 50bp cut on the cards The slightly larger-than-expected decline in Brazilian inflation in the first half of this month, to 4.5% y/y, seals the deal on another 50bp cut in the Selic rate (to 11.25%) at next week’s central …
26th January 2024
SARB holds again, replaying inflation risk concerns The South African Reserve Bank resisted responding to last month’s fall in inflation with an interest rate cut, leaving the repo rate unchanged at 8.25% today. The MPC’s message was little changed, …
25th January 2024
Today’s decision to leave interest rates unchanged, and the tone of the press release, were as expected. In the forthcoming press conference, Christine Lagarde is likely to push back against expectations for policy rates to start falling in April. It came …
Hiking cycle at an end, rates to stay high The 250bp interest rate hike from Turkey’s central bank (CBRT) today, to 45.00%, marks an end to its tightening cycle. Encouragingly, the communications were relatively hawkish and suggest that policymakers …
Norges Bank today reiterated that it will leave its policy rate at 4.5% “for some time”. But we think that inflation will fall rapidly this year, so when the Bank does start to cut rates, it will do so more quickly than its forecasts suggest. The decision …
Bank drops its hiking bias The Bank of Canada’s decision to drop its tightening bias today is the first step toward interest rate cuts. We continue to think that the Bank’s forecasts for the economy are too optimistic, and that inflation will slow faster …
24th January 2024
The central bank (BNM) left the overnight policy rate unchanged (at 3.0%) today and we think monetary policy is set for an extended pause as policymakers attempt to strike a balance between supporting the economy and combating inflation. The decision …
Policy normalisation is in sight Although the Bank of Japan stood pat at its meeting today, we’re sticking with our view that policymakers will soon call time on negative rates. The Bank’s decision to leave its policy rate unchanged at -0.1% was correctly …
23rd January 2024
This page has been updated with additional analysis since first publication Labour market will turn faster than the RBA anticipates With labour market data for December disappointing expectations, we’re more convinced than ever that the RBA will take its …
18th January 2024
Policy rate left unchanged, central bank hints at cuts later in the year Bank Indonesia left its policy rate on hold at 6.00% at its meeting today, but gave further hints that provided the rupiah continued to hold up well against the US dollar, there …
17th January 2024
This page has been updated with additional analysis since first publication. Downward trend stalls, but drop to below 2% still coming in April The unexpected rise in CPI inflation from 3.9% in November to 4.0% in December (consensus and CE forecast 3.8%) …
This page has been updated with additional analysis since first publication . The PBOC fails to deliver Despite a cut being widely expected, the MLF was again kept unchanged today – for a fifth straight month. The main factor holding the PBOC back was …
15th January 2024
NBR won’t cut rates as far as most expect in 2024 The National Bank of Romania (NBR) left its policy rate unchanged at 7.00% today and, although a monetary easing cycle seems to be drawing nearer, we think that interest rates are unlikely to be cut as far …
12th January 2024
This page has been updated with additional analysis since first publication . The renewed fall in Brazil’s headline inflation rate in December, to 4.6% y/y, paves the way for another 50bp cut to the Selic rate (to 11.25%) at the central bank’s next …
11th January 2024
On hold again, rate cuts in Q2 The Bank of Korea (BoK) left its main policy rate on hold today (at 3.5%), but with inflation cooling and growth set to struggle, we think the central bank will cut interest rates sooner than most expect. The decision was …
Inflation slowing, but will remain above target until mid-2025 Egypt’s headline inflation rate eased for a third consecutive from 34.6% y/y in November to 33.6% y/y in December. Comments last night suggest that an enhanced IMF deal is near, which is …
10th January 2024
This page has been updated with additional analysis since first publication. Disinflation will pave the way for policy loosening before long With price pressures cooling in earnest, we’re growing increasingly confident in our call that the RBA will start …
NBP has limited scope for rate cuts in 2024 The National Bank of Poland (NBP) left interest rates on hold again today, at 5.75%, and we continue to think that the scope for monetary loosening ahead is relatively limited. While the consensus view in recent …
9th January 2024
This page has been updated with additional analysis since first publication. Jump in headline inflation is just a blip December’s jump in headline inflation in the euro-zone was widely anticipated and entirely due to a base-effects driven increase in …
5th January 2024
Minutes more nuanced than expected, given post-FOMC hawkish chatter The minutes of the mid-December FOMC meeting were slightly more dovish that we were expecting – more in line with the message delivered by Fed Chair Jerome Powell in his press conference …
3rd January 2024
Leaving the door open for one more hike Turkey’s central bank (CBRT) delivered a 250bp interest rate hike, to 42.50%, at today’s meeting and didn’t close the door on the tightening cycle. We’ve now pencilled in one more 250bp hike at the next meeting in …
21st December 2023
Bank Indonesia left its policy rate unchanged at 6.0% today for a second consecutive meeting, but in its press conference hinted at the possibility of rate cuts in the second half of next year. However, with economic growth set to struggle and inflation …
This publication has been updated with additional analysis from the post-meeting press statement and press conference. 75bp cuts to continue for the time being The Hungarian central bank (MNB) cut its base rate by 75bp again today (to 10.75%), and we …
19th December 2023
The Bank of Japan left policy settings unchanged today as widely anticipated. And while Governor Ueda is sounding more confident that 2% inflation will be sustained, we now expect the Bank of Japan to end negative interest rates in March rather than in …
Bank of Japan will end negative rates next month The Bank of Japan left policy settings unchanged today as widely anticipated but we still expect policymakers to end negative rates in January and to phase out Yield Curve Control later in 2024. The Bank’s …
RBA will soon turn dovish The minutes of the RBA’s December meeting reinforce our view that the Bank will be shifting to rate cuts before long. As it has done at virtually every meeting this year, the Board discussed the option of a 25bp rate hike …
CBR slows down tightening, cycle not yet over Russia’s central bank (CBR) delivered a 100bp interest rate hike at today’s meeting, to 16.00%, and we still think that strong inflation pressures will force another rate hike in Q1. Today’s hike was in line …
15th December 2023
ECB holding the line for now The ECB’s decision to leave its deposit rate unchanged at 4.0% today and make only limited changes to the policy statement suggests that policymakers are pushing back against market expectations for rate cuts to begin in March …
14th December 2023
Few signs Bank of England is starting to contemplate rate cuts The Bank of England sprung no surprises, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. While the recent …
SNB leaves rates unchanged, but policy loosening is imminent The SNB kept rates on hold at 1.75% at today’s policy meeting, but the monetary policy statement was dovish as policymakers placed less emphasis on selling FX assets and reduced their inflation …
Taiwan’s central bank (CBC) left its policy rate unchanged again today, but with economic growth set to slow sharply and inflation on its way down, we expect the CBC to start cutting rates from June. The decision to leave the policy rate unchanged, at …
Rates on hold, cuts coming sooner than most expect The central bank in the Philippines (BSP) today left its main policy rate unchanged (at 6.50%), and hinted that it would be necessary to keep monetary conditions tight for the foreseeable future. …
