Bank of England Cuts Rates 50 Basis Points As Expected

March 5, 2009 by · Leave a Comment 

The Bank of England has cut Interest Rates by 50 BPS as expected to 0.50% from the previous 1.00%.

In addition, the BOE Announces a £75B Asset Purchase Program.

- Likely majority of assets to be purchased will be Gilts
- Will purchase medium and long term gilts in secondary market
- To finance purchases by issuing central bank reserves
- Operation to last for 3 months
- Still sees substantial risk of undershooting CPI target
- Chancellor Darling sets upper limit on program at £150B

***The GBP initially firmed up but quickly continued to soften up, falling to further session lows.

BoJ Leaves Interest Rates Unchanged as Expected

February 19, 2009 by · Leave a Comment 

BOJ LEAVES TARGET RATE UNCHANGED AT 0.10% (AS EXPECTED); PLANS TO START BUYING UP TO ¥1T CORPORATE BONDS OUTRIGHT AS SOON AS MARCH

- Vote was unanimous; BOJ member Suda voted against corp bond buying
- Leaves Lombard Rate at 0.30%
- Corporate bond purchases to continue through Sept
- Dollar supply operations to remain through October
- Economic assessment of further sharp deterioration retained
- Says conditions will keep deteriorating for some time; will continue monitor for additional downside risks
- Y/Y CPI likely to turn negative by spring; inflation will decline further if downside risks materialize
- Pledges to continue to take all measures for economic recovery
***The JPY is slightly firming following a pretty flat last few hours during Asian trading

ECB’s Liikanen on the Wires

February 6, 2009 by · Leave a Comment 

ECB’s Liikanen: Interest rate cut in March is possible; ECB is ‘of course’ afraid of situation in banks

- Financial market crisis cannot weaken the Euro currency
- Reiterates the ECB stresses both price stability and financial stability
- Different countries have different situations but one can only imagine what it would be like without the Euro currency
- Crucial to be balanced in the long run
- Situation could improve in 2009 but remains hard
*** Note: Comments echoes Trichet comments from yesterday’s press conference following the ECB interest rate decision

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