{"id":37898,"date":"2013-04-27T19:05:31","date_gmt":"2013-04-27T23:05:31","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=37898"},"modified":"2013-04-27T19:05:32","modified_gmt":"2013-04-27T23:05:32","slug":"monetary-policy-week-in-review-apr-27-2013-one-central-bank-cuts-pressure-grows-on-europes-politicians","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/04\/27\/monetary-policy-week-in-review-apr-27-2013-one-central-bank-cuts-pressure-grows-on-europes-politicians\/","title":{"rendered":"Monetary Policy Week in Review \u2013 Apr 27, 2013: One central bank cuts, pressure grows on Europe’s politicians"},"content":{"rendered":"

By www.CentralBankNews.info<\/u><\/a>
    Last week nine central banks took policy decisions, with Hungary continuing its rate-cutting spree and the other eight banks (Namibia, New Zealand, Philippines, Fiji, Japan, Mexico, Colombia and Trinidad & Tobago) keeping rates unchanged as pressure mounted on euro zone policy makers to get serious about reforms and speed up growth.
    A quiet exasperation over the lack of action by Europe\u2019s policy makers turned into more forceful criticism during the annual meeting of the International Monetary Fund in Washington D.C. with signs that the dogged belief in austerity as a growth strategy is starting to break down.
    The other theme dominating central banking last week was the continuing fallout from Japan\u2019s aggressive policy easing, which has lead to a weaker yen and upward pressure on other currencies as some of the Bank of Japan\u2019s money looks for higher yield outside the country.
    The Bank of Korea\u2019s governor expressed his concern over the impact of the weaker yen on the competitiveness of his country\u2019s industry; the Bank of Thailand is considering how to reduce the upward pressure on the bath; the Reserve Bank of New Zealand said upward pressure on the overvalued kiwi dollar was growing and the Bank of Israel said money was flowing into its bonds.
    Last year\u2019s warning by Mervyn King, the outgoing governor of the Bank of England, that 2013 could feature \u201cactively managed exchange rates as an alternative to the use of domestic monetary policy\u201d was prescient and slightly ominous.<\/p>\n

    Through the first 17 weeks<\/b> of this year, the overwhelming majority of the world\u2019s central banks have kept their rates on hold: 78 percent of the 156 policy decisions taken so far by the 90 central banks followed by Central Bank News have lead to unchanged rates, slightly up from 77 percent after 16 weeks.
    Globally, 19 percent of policy decisions this year have lead to rate cuts – largely by central banks in emerging economies \u2013 unchanged from last week.
    Rate rises are still rare \u2013 there have only been six so far this year \u2013 but this number is likely to rise in the second half of the year as global growth slowly strengthens and inflationary pressures rise, especially in Southeast Asia.<\/p>\n

    The only real sinkhole<\/b> in global growth remains Europe and policy makers from around the world appear to be losing their patience with the euro zone’s lack of progress in solving its problems.
    Through the barrage of statements and communiqu\u00e9s from the IMF and G20 meetings, it is clear that global policy makers have decided that Europe\u2019s experiment with harsh austerity has gone far enough. Recession, popular dissatisfaction and growing unemployment bear witness to the strategy\u2019s failure.
    There was a remarkable confluence of criticism of austerity last week: The validity of the academic work used to underpin pro-austerity policies was questioned; the IMF stressed that fiscal tightening should only occur at a pace that economic recovery can handle \u2013 underlining the shift away from its traditional position as an advocate of austerity – while African finance ministers insisted euro zone politicians \u201cwork harder and faster\u201d so growth in their own economies isn\u2019t undermined.
    The bottom line is that the fragile global economic recovery may falter without growth in Europe and this year it\u2019s economy is set to contract for the second year in a row.
    And the criticism, all too often shouted through the streets of Athens, Madrid, Rome and Lisbon, is finally being heard by a growing number of top policy makers.
    Christine Lagarde, IMF managing director, talked of  “adjustment fatigue” and growing tensions over the fairness of public policy, while European Commission President Jose Manuel Barroso said the combination of lower spending and higher taxes may have hit the limits of public acceptance and was now contributing to the recession.
    But so far the austerity camp seems unbowed and one its leading proponents, German Chancellor Angela Merkel, even had the audacity to up the ante, saying the European Central Bank would have to raise interest rates if its policy was based purely on German conditions.
    Although Germany is doing better than many of its euro zone brethren, it\u2019s economy is hardly in need of cooling. The German economy shrank by 0.6 percent in the fourth quarter of 2012 from the third quarter and is forecast to grow a mere 0.5 percent in 2013, it’s inflation rate fell to 1.4 percent in March, below the ECB’s target, and the unemployment rate is 5.4 percent.<\/p>\n

<\/p>\n

LAST WEEK\u2019S (WEEK 17) MONETARY POLICY DECISIONS<\/b>:<\/div>\n
\n <\/p>\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n\n\n\n\n\n\n\n\n\n\n\n
COUNTRY<\/td>\nMSCI<\/td>\n    NEW RATE  <\/td>\n        OLD RATE<\/td>\n       1 YEAR AGO<\/td>\n<\/tr>\n
HUNGARY<\/td>\nEM<\/td>\n4.75%<\/td>\n5.00%<\/td>\n7.00%<\/td>\n<\/tr>\n
NAMIBIA<\/td>\n<\/td>\n5.50%<\/td>\n5.50%<\/td>\n6.00%<\/td>\n<\/tr>\n
NEW ZEALAND<\/td>\nDM<\/td>\n2.50%<\/td>\n2.50%<\/td>\n2.50%<\/td>\n<\/tr>\n
PHILIPPINES<\/td>\nEM<\/td>\n3.50%<\/td>\n3.50%<\/td>\n4.00%<\/td>\n<\/tr>\n
FIJI<\/td>\n<\/td>\n0.50%<\/td>\n0.50%<\/td>\n0.50%<\/td>\n<\/tr>\n
JAPAN<\/td>\nDM<\/td>\n0.00%<\/td>\n0.00%<\/td>\n0.10%<\/td>\n<\/tr>\n
TRINIDAD & TOBAGO<\/td>\n<\/td>\n2.75%<\/td>\n2.75%<\/td>\n3.00%<\/td>\n<\/tr>\n
MEXICO<\/td>\nEM<\/td>\n4.00%<\/td>\n4.00%<\/td>\n4.50%<\/td>\n<\/tr>\n
COLOMBIA<\/td>\nEM<\/td>\n3.25%<\/td>\n3.25%<\/td>\n5.25%<\/td>\n<\/tr>\n

<\/tbody>\n<\/table>\n<\/div>\n

<\/div>\n
<\/div>\n
Next week<\/b> (week 18) features seven central bank policy decisions, including heavyweights the United States, the European Central Bank and India, plus Angola, the Czech Republic, Romania and Uganda.<\/div>\n
<\/div>\n
\n <\/p>\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n<\/col>\n\n\n\n\n\n\n\n\n\n
COUNTRY<\/td>\nMSCI<\/td>\n             DATE<\/td>\n              RATE<\/td>\n       1 YEAR AGO<\/td>\n<\/tr>\n
ANGOLA<\/td>\n<\/td>\n29-Apr<\/td>\n10.00%<\/td>\n10.25%<\/td>\n<\/tr>\n
UNITED STATES<\/td>\nDM<\/td>\n1-May<\/td>\n0.25%<\/td>\n0.25%<\/td>\n<\/tr>\n
EURO AREA<\/td>\nDM<\/td>\n2-May<\/td>\n0.75%<\/td>\n1.00%<\/td>\n<\/tr>\n
CZECH REPUBLIC<\/td>\nEM<\/td>\n2-May<\/td>\n0.05%<\/td>\n0.75%<\/td>\n<\/tr>\n
ROMANIA<\/td>\nFM<\/td>\n2-May<\/td>\n5.25%<\/td>\n5.25%<\/td>\n<\/tr>\n
UGANDA<\/td>\n<\/td>\n3-May<\/td>\n12.00%<\/td>\n20.00%<\/td>\n<\/tr>\n
INDIA<\/td>\nEM<\/td>\n3-May<\/td>\n7.50%<\/td>\n8.00%<\/td>\n<\/tr>\n

<\/tbody>\n<\/table>\n<\/div>\n

<\/div>\n
<\/div>\n
    www.CentralBankNews.info<\/a><\/div>\n
<\/div>\n
<\/div>\n

<\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

By www.CentralBankNews.info     Last week nine central banks took policy decisions, with Hungary continuing its rate-cutting spree and the other eight banks (Namibia, New Zealand, Philippines, Fiji, Japan, Mexico, Colombia and Trinidad & Tobago) keeping rates unchanged as pressure mounted on euro zone policy makers to get serious about reforms and speed up growth.  … <\/p>\n

Continue reading “Monetary Policy Week in Review \u2013 Apr 27, 2013: One central bank cuts, pressure grows on Europe’s politicians”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-37898","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/37898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=37898"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/37898\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=37898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=37898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=37898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}