This post already appeared in the blog yesterday; Roubini Global Economics Emerging Markets EconoMonitor is just republishing it, but I just wanted to cross-link for the readers who might have missed it the first time around...
There is an addendum in the blog as well, if you are interested. And if you haven't heard already, no surprises in the CBT rate decision (English version not available yet), as far as I can see: The Bank cut the policy rate 50bp, from 7 to 6.50 percent, as expected. And it also increased the gap between its overnight borrowing and lending rates, by cutting the former from 1.75 to 1.50 percent, and the latter from 8.75 to 9 percent. This is in line with the Bank's goal of ending its dual presence as a lender and borrower, i.e. increase intrabank lending...
There is an addendum in the blog as well, if you are interested. And if you haven't heard already, no surprises in the CBT rate decision (English version not available yet), as far as I can see: The Bank cut the policy rate 50bp, from 7 to 6.50 percent, as expected. And it also increased the gap between its overnight borrowing and lending rates, by cutting the former from 1.75 to 1.50 percent, and the latter from 8.75 to 9 percent. This is in line with the Bank's goal of ending its dual presence as a lender and borrower, i.e. increase intrabank lending...
BTW, I just saw, when I checked thee CBT web site for the English version of the MPC one-pager, I saw that the English translation of the famous Basci presentation is now available. So here's the English version of the slide I explain in the piece:
I think I already said what I would like to say about the rate cut, so I don't think I will have another addendum. But I'll just wait and see the probable reserve requirement hike and the market reaction tomorrow before I scribble anything...
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