March 07, 2024
![PE.png](https://static.heteronomics.com/images/PE.2e16d0ba.fill-1080x607.png?Expires=1714358095&Signature=kLZ~RqcBnBqIAIBhOygyHM-mvFbZGzIpAYPfL8ie4a1hTpq9aVQnE7G8chv3UB~rljQ3HRoP4-crhQ-OrX8Mur30T6ra6UzC~mSC7a6RpqHKIUl1XBT9pOAxlQ1GmlBZxrTFB3~tE~emigMSv6k2cmfBVIzVkY7QLsg2pv-MqOvVURPDdDDPqePZak0wDv5r54wCG-k-n007231RTbXdRx~koVXut4dsLGMW9kJ-ate75Vt8ojMUJj8lHHZLh-pSrnm78THwJ86KBd4fARofMygGQ6fyxYWd5WOGTENUJFHi7bv7t5WQvAsUFMYooXRoWhWkcehn974~304ADTGRuA__&Key-Pair-Id=K2NMLIS3J0RGKR)
Peru Policy Interest Rate 6.25% (consensus 6.0%) in Mar-24
- The Central Reserve Bank of Peru (BCRP) unexpectedly maintained its policy rate at 6.25%, against consensus expectations for a cut. It signalled a careful approach to managing inflationary pressures while initiating a complementary easing through reduced reserve requirements.
- This policy decision focuses on liquidity enhancement and economic stimulation without exacerbating inflationary risks, reflecting a nuanced balance in monetary policy strategy.
- Future adjustments to the BCRP's monetary stance will be closely tied to inflationary trends and economic indicators, with a steadfast commitment to guiding inflation back within the target range amid global uncertainties and domestic economic challenges.
March 07, 2024
![2024-03-07 EA_head.png](https://static.heteronomics.com/images/2024-03-07_EA_head.2e16d0ba.fill-1080x607.png?Expires=1714358095&Signature=eK1VdTO5qRTcn3~NdcUcFfnJk7XSmQMzRnKpCliGrtcQKslamuu6keXXfgZMkX3hkl9s4BxGpQ~cQMYa7j6VeP1rvuIXGm71PXfkfhTcRwqtSBdBUC2amGDhb5kOg7hQoVoYKwuXdcMxZ6DFgHCP1-Z89CnApSfLJ9OB416Uk04PBW9S9SlbhyFzrx0qBWNaN8z~Yp5O9rZmizR2pdLgFZLjB6xwLrj7tjCsdYWvhsJ4FdYWffmEuiVp4zv99XUwgodYX2XlyLGqphY5p9Zz8ye6tUUOI40luHKZaI8m0h3lj9NiQDlFfU4npO~YXXejLmPSBGd2qLmllVjLaBlICQ__&Key-Pair-Id=K2NMLIS3J0RGKR)
ECB Calmly Awaits News
- The ECB unanimously maintained its policy rates and did not even discuss cuts despite this meeting being dovishly priced as starting a cutting cycle until recently.
- April is effectively ruled out, barring a crisis, with weakening wages needed to justify a June start. Resilient services inflation may mean wage costs are not benign enough.
- Although we believe the ECB expects to cut in June, we still expect resilience to delay that first move to September. A high neutral rate would also limit and slow cuts.
By Philip Rush
March 06, 2024
![CA.png](https://static.heteronomics.com/images/CA.2e16d0ba.fill-1080x607.png?Expires=1714358095&Signature=YqwFAPai06~VSZKeG8icbMme8NYqPVmLaTOhWLDudqsabxbD11mpkD9145wkTYg33TwYp9Thz53dt9b6fdRZlEUy3~R7BQxvnYGZ4fWkY-cp3cPqi1NJiSKm9k1lprB6ICEOCdgQEn6tRyvEERU8b99qA4T6GBB6OBTq37USw~Os95lu3McYiA3d10e6lND8Qr4RcogSp2UYKUqbPhv7QkKbBSnDAR0brobaswRH7OgwbNLF6rjcDYrMAodQ~vVOFZUej6ajCC1TxREeeWSwGcQOOa6GqTlQHAhz16HcSK4a-oxPW~iturrAVXKC87TWG1OM8vmMLTU8ETTqMUYq0Q__&Key-Pair-Id=K2NMLIS3J0RGKR)
Canada Policy Interest Rate 5.0% (consensus 5.0%) in Mar-24
- The Bank of Canada's decision to hold the policy rate at 5% aligns with economic consensus. It was influenced by a global economic slowdown, easing inflationary pressures, and modest domestic growth below potential.
- Despite CPI inflation moderating to 2.9%, concerns over persistent core inflation and elevated shelter costs underscore the need for continued vigilance. The Bank anticipates inflation to stay close to 3% in the near term before gradually easing, with a full return to the 2% target expected by 2025.
- The Bank remains open to adjusting the policy rate if inflationary surprises occur. Its current focus is on monitoring wage growth, demand-supply balance, inflation expectations, and corporate pricing behavior. The decision process incorporates domestic conditions and global economic dynamics, ensuring readiness to act to maintain price stability.
February 28, 2024
![NZ.png](https://static.heteronomics.com/images/NZ.2e16d0ba.fill-1080x607.png?Expires=1714358095&Signature=z2kz~vk3OhKmdkBoXWjCeuWNzx2RxNkPuV6fTinx~hVKLZCHHNJRmiLHDWp2e3JdnDnGC7Rg2UrkE7cwYUhy24w9tDKUGAOhTCNLJ5YR5BGUnGjuQZjSmj6oU4kW-uzTuKFILtQBVlOHYEPfG19UZ8gDad9tSE3QPyYE52aEIO8vapfaGHnqs-4omM8p07kdq0kIuNGt7iSHJQ2tRw7UcKBFzzrKgPFuQjxlhfErmXpCt4KMejHAuFeKclXjPWCxn8kzPIVLpZv0Bs96JIQ4hUKlMsvxHtjZfZdo61-CGFitjvPIQLyWIm93rP3q6xq4YoikCVvwA~o5mjJy4cjUbw__&Key-Pair-Id=K2NMLIS3J0RGKR)
New Zealand Policy Rate 5.5% (consensus 5.5%) in Feb-24
- The Reserve Bank of New Zealand's decision to maintain the OCR at 5.50% is predicated on a strategic imperative to curb inflationary pressures amid a complex interplay of domestic capacity easing and sustained global economic challenges.
- Global economic uncertainties, coupled with geopolitical and environmental risks, notably in shipping costs, present nuanced inflationary pressures that the MPC is poised to address through sustained restrictive monetary policy.
- The ongoing assessment of fiscal policy impacts, alongside the vigilance towards domestic and global economic developments, will critically inform the MPC's future policy decisions, underscoring a commitment to steering inflation towards the target range while fostering economic stability.
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