Monetary Policy Week in Review – Oct. 20, 2012: Interest rates still heading lower as Thailand and Turkey trim rates

By Central Bank News

The past week in monetary policy saw interest rate decisions by four emerging market central banks, with Thailand cutting its rates, Chile and Egypt holding rates steady, and Turkey holding rates but effectively easing policy by trimming the top rate of its interest rate corridor.

   Thailand’s rate cut was the only real surprise, with the bank seeking to bolster domestic demand to make up for exports that are suffering from weaker global demand. 

   Apart from Egypt, the banks noted the improved sentiment in global financial markets, including the euro zone, but Chile said it was still uncertain how Europe’s new policy measures would be implemented and tensions could flare up in months ahead.

   Turkey, whose exports are still rising, narrowed its interest rate corridor for the second month, but is being very cautious about easing as inflation is significantly above the central bank’s target.


LAST WEEK’S MONETARY POLICY DECISIONS:

COUNTRY MSCI NEW RATE OLD RATE RATE 1 YEAR AGO
THAILAND EM 2.75% 3.00% 3.50%
TURKEY EM 5.75% 5.75% 5.75%
CHILE EM 5.00% 5.00% 5.25%
EGYPT EM 9.25% 9.25% 8.25%

NEXT WEEK (Week 43) is busy on the central banking front, featuring decisions by 11 central banks, including the Bank of Canada, the Federal Reserve, New Zealand, Sweden and Mexico.

COUNTRY MSCI DECISION CURRENT RATE RATE 1 YEAR AGO
SRI LANKA FM 22-Oct 7.75% 7.00%
CANADA DM 23-Oct 5.75% 5.75%
UNITED STATES DM 24-Oct 0.25% 0.25%
NAMIBIA 24-Oct 5.50% 6.00%
GEORGIA 24-Oct 5.75% 7.25%
NEW ZEALAND DM 24-Oct 2.50% 2.50%
SWEDEN 25-Oct 1.25% 2.00%
PHILIPPINES EM 25-Oct 3.75% 4.50%
FIJI 25-Oct 0.50% 1.50%
MEXICO EM 26-Oct 4.50% 4.50%
TRINIDAD & TOBAGO 26-Oct 2.75% 3.00%

www.CentralBankNews.info

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