{"id":22120,"date":"2011-07-05T07:29:54","date_gmt":"2011-07-05T11:29:54","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=22120"},"modified":"2011-07-05T07:29:54","modified_gmt":"2011-07-05T11:29:54","slug":"global-interest-rate-movements-half-year-review","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/07\/05\/global-interest-rate-movements-half-year-review\/","title":{"rendered":"Global Interest Rate Movements: Half-Year Review"},"content":{"rendered":"

By CentralBankNews.Info<\/strong><\/p>\n

This article reviews the monetary policy interest rate activity of the world’s central banks during the first half of 2011. \u00a0The key takeaway is that monetary policy tightening has been the dominant game for most emerging market central banks in the first half of the year, however the majority of central banks are still in the no-change camp. \u00a0Indeed of the 79 central banks that Central Bank News monitors, 33 made net increases to their interest rates<\/a>, while 40 held their rates net unchanged, and only 6 made net reductions to their policy interest rates.<\/p>\n

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Of the central banks that net increased their interest rates, the average increase was 111 basis points, but with many opting for 25 (8), or 50 (7) basis points. \u00a0Meanwhile the outliers were Vietnam (600bps) and Belarus (550bps); the former dealing with hyperinflation, and the latter dealing with a number of economic worries. \u00a0And it wasn’t only emerging markets that were net tighteners in the first half; Denmark, Norway, the EU, and Sweden were\u00a0among\u00a0those to tighten monetary policy settings.<\/p>\n

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As for those that loosened interest rates, it was much a case of being the outlier. \u00a0New Zealand dropped its official cash rate earlier this year after an earthquake hit one of its cities. \u00a0Meanwhile Iceland dropped rates in response to low inflation and continued economic challenges. \u00a0Qatar dropped its policy rate to help the non-energy part of its economy, and Ghana dropped rates due to easing in domestic inflation pressures.<\/p>\n

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So overall the first half of the year in monetary policy interest rates was characterised by inaction for most, tightening by many, with a few outliers reducing interest rates. \u00a0Much of the policy tightening went on in emerging markets where inflation has been pushed above inflation targets<\/a> due to rising global commodity prices and strong economic growth and activity levels (i.e. both demand pull and cost push).<\/p>\n

Going into the second half of the year the outlook is less certain, which in part explains inaction being the main stance for most of the monetary policy setters. \u00a0On commodities, there has been a recent correction in broad commodity prices, and many commodities finished the past quarter with price falls. A stable or falling global commodity price environment could see less tightening, and perhaps pockets of loosening.<\/p>\n

Meanwhile the global economic growth outlook continues to be uncertain, with some economies e.g. the US making slow progress, and tail risks e.g. Greek sovereign debt default, having the potential to pull back the aggregate demand impulse. \u00a0So out next review could well see more banks opting for no change or even net policy loosening. \u00a0In any case, keep checking the website<\/a> for monetary policy updates.<\/p>\n

Source:<\/strong> www.CentralBankNews.info<\/a><\/p>\n

Article source: <\/strong>http:\/\/www.centralbanknews.info\/2011\/07\/global-interest-rate-movements-half.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This article reviews the monetary policy interest rate activity of the world’s central banks during the first half of 2011. The key takeaway is that monetary policy tightening has been the dominant game for most emerging market central banks in the first half of the year, however the majority of central banks are still in the no-change camp. <\/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-22120","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/22120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=22120"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/22120\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=22120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=22120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=22120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}