Thursday, 18 April 2013

Many central banks stick to old tools while big guns experiment

(Reuters) - While the world's leading central banks work with new tools to fix their flagging economies, those in many developing countries are still using old-fashioned interest rates to try to contain price rises.

In Brazil, where inflation pierced the government's target ceiling in March, rate hikes are seen as almost inevitable as sharp price increases have begun to irk Brazilians and could spoil President Dilma Rousseff's bid for re-election next year.

In Nigeria, the central bank kept rates on hold at 12 percent for a ninth time in a row last month, citing concerns about external price pressures.

Even in Asia, South Korea's central bank held interest rates steady this month and signalled no rate cut soon, defying political pressure for a rate cut in response to Japan's bold monetary easing and tensions with North Korea.

In fact, only 14 of 90 central banks tracked by CentralBankNews.Info have ultra-low rates of 1 percent or lower.

No comments:

Post a Comment