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Philippines CB Revises Inflation Forecasts, Hong Kong Posts Smallest Trade Gap in 5 Months, SNB Maintains Expansionary Monetary Policy

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Philippines CB Revises Inflation Forecasts
The central bank of the Philippines left the key overnight repo rate steady at 2% on March 25th 2021, in line with expectations. The overnight deposit rate and lending facilities were also left on hold at 1.5% and 2.5%, respectively. Policymakers revised inflation forecasts higher. In 2021, the inflation is seen at 4.2 percent, above the upper end of the target range of 2-4 percent, amid supply-side constraints for meat as well as the continuing uptick in international oil prices. In 2022, inflation is expected to slow to 2.8 percent.

Hong Kong Posts Smallest Trade Gap in 5 Months
The trade deficit in Hong Kong shrank to HKD 14.7 billion in February of 2021 from HKD 38.6 billion a year ago. It was the smallest trade gap since September, as exports advanced 30.4% year-on-year to HKD 311 billion, amid higher sales of electrical machinery, apparatus and appliances, and electrical parts thereof (39.3%); telecommunications and sound recording and reproducing apparatus and equipment (37.6%); office machines and automatic data processing machines (27.1%) and non-ferrous metals (249.4%). Meantime, imports rose at a slower 17.6% to HKD 326 billion, on account of electrical machinery, apparatus and appliances, and electrical parts thereof ( 27.2%); telecommunications and sound recording and reproducing apparatus and equipment (27.8%); office machines and automatic data processing machines (23%) and non-ferrous metals (160.0%).

SNB Maintains Expansionary Monetary Policy
The Swiss National Bank held its policy rate at -0.75 percent and the interest rate it charges on overnight deposits it holds for commercial banks at -0.75 percent during its March meeting, saying the Swiss franc remains highly valued, despite the recent weakening, and the coronavirus pandemic continues to have a strong adverse effect on the economy. Policymakers noted that the recovery is likely to regain momentum from the second quarter, helped by the expected progress with vaccination programmes, alongside the monetary and fiscal policy measures introduced worldwide. Looking forward, the SNB continues to expect GDP growth of 2.5 percent to 3 percent for 2021, as the containment measures in Switzerland will be eased further in the coming months, while inflation forecasts for 2021 and 2022 were revised higher, due to the rise in oil prices and the weaker Swiss franc. The forecast now stands at 0.2 percent for 2021, 0.4 percent for 2022 and 0.5 percent for 2023.

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