ECB
rates on hold for now, Fed moves key - Welteke
The European
Central Bank's interest rate policy is on hold for the
time being, though another sharp cut from the U.S. Federal
Reserve would force European policymakers to carefully
assess their stance, Bundesbank President ECB board member
Ernst Welteke said January 26. "There are no signals yet
that we should change our monetary policy," told reporters
on the margins of the World Economic Forum in Davos. [26-January-2001]
Fraga
says US slowdown will have no major impact on Brazil
A slowdown in
the U.S. economy won't have a major impact on Brazil,
in part because of the diversity of Brazil's export markets,
central bank governor Arminio Fraga said Jan. 26. "Scenarios
of economic deceleration, without a major crisis or anything
extreme, are manageable for us," Fraga told reporters
on the margins of the World Economic Forum in Davos, adding
that the chances of such a crash are "very improbable."[
26-January-2001]
Mexico
Ortiz sees 2001 inflation 6.5% despite VAT
Official Mexican
inflation targets for 2001 won't be changed whatever the
impact of a value-added tax to be imposed shortly on certain
goods, central bank governor Guillermo Ortiz said Jan.
26, 2001. Mexico is to impose VAT on food and medicines
by an unknown amount, but this won't deflect from the
central bank's goal of keeping inflation "as close as
possible to...or below" 6.5%, Ortiz said. "The Bank of
Mexico will make sure that this (tax increase) will not
translate into higher inflation expectations," Ortiz said
on the margins of the World Economic Forum in Davos. [
26-January-2001]
Riksbank
new board member is economist, ex-MEP
Kristina Persson,
an economist and former MEP, was appointed on Jan. 26,
2001, to fill a vacant seat on the Swedish Riksbank central
bank's seven-member board of governors, which sets monetary
policy, the bank said. Persson, 55, who has worked at
the finance ministry and been a member of both the Swedish
and European Parliaments for the Social Democrats, was
elected for a period of six years starting February 2001,
the Riksbank said in a statement. [ 26-January-2001]
Macedonia
central bank intervenes to prop denar
The National
Bank of Macedonia (NBM) said on Jan. 26, 2001, it will
begin intervention on the domestic foreign exchange market,
selling marks to meet surging demand which has eroded
the national currency, the denar. "The denar came under
pressure from rising foreign currency demand, which banks
and exchange bureaux are unable to meet now. The central
bank must intervene to stop the fall of the denar," a
central bank official said. [26-January-2001]
Cyprus
angered at Yugo claim on Milosevic cash
One-time Serbian
ally Cyprus on Jan. 26 angrily rejected assertions that
it was not co-operating with inquiries to track down funds
siphoned overseas by former Yugoslav president Slobodan
Milosevic. Cypriot Foreign Minister Ioannis Cassoulides
said he had instructed his ambassador in Belgrade to lodge
a protest over comments made by Yugoslavian central bank
governor Mladjan Dinkic. Dinkic had on Jan. 25 said Switzerland,
Greece and Cyprus were not co-operating with inquiries
to trace secret accounts held by the former Yugoslav president,
whose former employers Beogradska Banka were once one
of the largest offshore banks on the island. [26-January-2001]
Czech
house wants cbank aim cut from constitution
The lower house
of the Czech parliament agreed on Jan. 26, 2001, to cut
the central bank's policy aim out of the constitution,
a part of a wider revamp of central bank laws by the country's
two main parties. But the constitutional amendment is
expected to be killed in the upper house, the Senate,
where parties supporting it are far short of the needed
60 percent majority. The amendment was pushed through
by the ruling Social Democrats and their parliamentary
allies, the Civic Democrats, with 123 votes to 35 in the
lower house. [26-January-2001]
RBNZ
Brash -Svensson report due 'within next few weeks'
A New Zealand
government-appointed independent review into the country's
monetary policy making will publish its findings within
a few weeks, Reserve Bank Governor Don Brash said on Jan.
26, 2001. The review is being conducted by Lars Svensson,
professor of international economics at Stockholm University's
Institute for International Economic Studies. Brash was
speaking to a Christchurch business audience. One aspect
of the current monetary policy framework, which featured
strongly in submissions to Svensson's review, Brash said,
relates to the way in which the Reserve Bank Act places
all monetary policy decision-making in the hands of the
governor. That means the question of the appropriate decision-making
structure is likely to feature prominently in the forthcoming
report, he said. [26-January-2001]
Iceland
cbank intervenes anew as crown falls more
Iceland's central
bank said on Jan. 25 it intervened in the local foreign
exchange market for the second day in a row, buying one
billion Icelandic crowns ($11.51 million) to halt the
crown's recent slide. [25-January-2001]
Greenspan
suprises with support for Bush tax cuts
Federal Reserve
Board Chairman Alan Greenspan delivered some surprising
support for President George W. Bush's call for a $1.6
trillion tax cut, saying tax cuts will benefit the economy
in the long run. "In today's context, where tax reduction
appears required in any event over the next several years...,
starting that process sooner rather than later likely
would help smooth the transition to longer-term fiscal
balance," Mr. Greenspan said in remarks before the Senate
Budget Committee. [25-January-2001]
Eichel
plans to strengthen role of Buba president
German Finance
Minister Hans Eichel Jan. 25 presented his proposal for
streamlining the Deutsche Bundesbank, aimed at strengthening
the position of the bank's president at the expense of
the nine regional bank heads. But likely opposition to
the plans in the upper house of parliament suggests a
protracted legislative process that could still add some
changes to the reform proposal. [25-January-2001]
Lithuanian
cbank okays draft bill for litas repeg
Lithuania's
central bank said on Jan. 25 its board approved a draft
amendment to law aimed at clearing the path for a shift
in the litas currency's peg to the euro from the dollar
without devaluation. "The main goal of this amendment
is to ... give Lithuania the opportunity to choose the
euro as an anchor currency and to do this process without
devaluation or revaluation of the litas," the bank said
in a statement. [25-January-2001]
...and
governor Reinoldijus Sarkinas reappointed
In a separate
move, the Lithuanian parliament voted Jan. 23 to appoint
Reinoldijus Sarkinas for a second five-year term as the
governor of the central Bank of Lithuania. His new term
begins on Feb. 15, 2001. The motion passed with 74 votes
in favour, no votes against and two abstentions. Lithuania's
President Valdas Adamkus has said he decided to re-nominate
Sarkinas, 54, as central bank governor in order to maintain
the stability of the state's financial system. The central
bank has had five governors since Lithuania regained its
independence from Moscow in 1990. Sarkinas, formerly a
finance minister, so far has been the only governor to
serve the full term of five years. [23-January-2001]
Indonesia
plans talks with IMF, World Bank
Indonesia will
hold talks with top IMF and World bank officials during
the World Economic Forum (WEF) in Davos to determine if
it can secure funds to help prop up its shattered economy.
Chief economics minister Rizal Ramli is due to meet World
Bank chief James Wolfensohn and IMF first deputy managing
director Stanley Fischer to discuss a $400 million loan
which was held back in December 2000 because of the slow
pace of economic reform. [25-January-2001]
BoJ
Gov dismissed worries over financial stability
Bank of Japan
Governor Masaru Hayami has downplayed concerns that the
country's financial stability could be put at risk by
falling stock prices. Speaking on Jan. 25 at the Upper
House audit committee, the central bank chief said, "there
is no need to be alarmed that worries over the financial
system will arise before the March 2001 fiscal year-end."
[25-January-2001]
IMF
welcomes Sri Lankan rupee free float
The International
Monetary Fund Jan. 24 welcomed Sri Lanka's free float
of the local currency, saying the exchange rate could
now be determined more freely by market forces. "The new
exchange rate arrangement is in keeping with the broader
reform agenda of Sri Lanka to develop a more open, market-based
economy," a statement from the IMF said. [24-January-2001]
Bank
of Israel posts $1.6bn excess expense in 2000
The Bank of
Israel said on Jan. 24 its expenses exceeded income by
6.7 billion shekels ($1.6 billion) in 2000 compared with
an 8.7 billion shekel deficit in 1999. "This was the result
of two main factors: The first, an excess of 3 billion
shekels in interest expenses, compared with an excess
of 5.2 billion in 1999," the central bank said in a statement.
"The second factor is a loss of 3.7 billion shekels on
exchange rate differentials, compared with 3.5 billion
shekels in 1999, as a result of the shekel's appreciation,"
the statement said. [24-January-2001]
UK's
MPC voted 5-4 to leave rates steady in Jan
Britain's central
bank was split almost down the middle over whether to
cut interest rates this month, with five of the nine members
voting to leave rates steady at 6.0 percent while four
wanted to lower borrowing costs. The Bank of England's
chief economist Charles Bean, along with external member
Christopher Allsopp, joined the two members - Sushil Wadhwani
and DeAnne Julius - who had voted for a cut last month.
[24-January-2001]
Jakarta
court to decide Feb 1 on cbank head's case
Indonesia's
Central Jakarta Court said on Jan. 24 it would decide
next week whether to continue the corruption trial of
central bank governor Syahril Sabirin. Sabirin has labelled
absurd the accusations which link him to a long-running
scandal over huge fees paid to a politically well-connected
bank to collect loans for a major local bank. [24-January-2001]
Bank
of Russia forms internet regulation division
In preparation
for regulating banking operations on the Internet, the
Bank of Russia has created a special division within its
department for monitoring banks. Bankers have greeted
this news enthusiastically, with the hope that the new
division will establish clear rules of the game and foster
the growth of a new form of banking services. Alexei Simanovsky,
head of the central bank's monitoring department, told
reporters last week that the new division should study
banking services offered on the Internet and develop standards
for those operations. [24-January-2001]
Sylvia
Piterman leaves Bank of Israel
Sylvia Piterman,
who has worked at the Bank of Israel for over 25 years,
and almost 10 of those years as Director of the Foreign
Currency Department, will be leaving the bank in the very
near future. Following her departure Mr. Barry Topf will
become Acting Director and will assume all her responsibilities.
Mr Topf has worked with Ms Piterman for many years and
a smooth and quick transition is expected. [ 22-January-2001] |
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