With a Reserve Bank of India policy rate of 6%, and lending rates around 8.5%, credit is extremely cheap.
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The European Central Bank raised its policy rate by a quarter point in early July in order to send just such a message of intent to price-setters and wage-negotiators.
The Bank of England's Monetary Policy Committee cut the Bank rate by half a percentage point to 4.5% in a surprise move last Wednesday.
Borrowing costs have surged as the central bank raised its policy lending rate 13 times between early 2010 and late 2011 to control inflation.
On March 19, the central bank lowered its main policy rate by a quarter percentage point--the second cut in 2013--but warned it had limited room for more reductions.
When the bank took over interest-rate policy from the Treasury in 1997, it gave up its role as manager of public debt as well as its job supervising banks.
The central bank cut its policy lending rate by a quarter percentage point in late January it was the second rate reduction in four years but also cautioned that it had limited space for further policy easing.
By contrast, India's central bank cut its policy interest rate in January and is looking to cut further to stimulate its economy, but may be beaten to the punch by the gathering pace of growth.
The government has taken measures such increasing the limit on foreign investment in several sectors to boost the economy, while the central bank cut its policy interest rate by a quarter of a percentage point last month.
It seems the Ministry of Finance has ceded foreign exchange rate policy back to the Central Bank where it belongs. the bank has, for now, won the policy argument that further weakening of the real will be inflationary and lead to a stronger real exchange rate, says Tony Volpon, managing director at Nomura Securities in New York.
This will require further measures beyond the current zero interest rate policy of the Bank of Japan.
However, for the previous three months, three members of the Bank's rate-setting Monetary Policy Committee have voted to increase rates.
One explanation for all the confusion is that it reflects a deeper uncertainty about why the Bank adopted its zero interest-rate policy in the first place.
Minutes from the latest meeting of the Federal Open Market Committee, the central-bank panel that sets interest-rate policy, indicate a rate-cut idea has been around for a while.
In late January, the Reserve Bank of India reduced its policy rate by a quarter of a percentage point, the first cut since April 2012, but tempered expectations of further reductions due to high inflation and a wide current account deficit.
The Item Club says that the change should be used by the Treasury to "review the remit" that it gives the Bank's interest rate-setting Monetary Policy Committee.
In late January, the Reserve Bank of India cut its policy lending rate by a quarter of a percentage point--the first rate cut since April and the second in about four years--but said it had limited room to ease rates further given India's high inflation and wide current-account deficit.
The refinancing rate that the ECB cut today has been at 0.75% since last July: Higher than the Federal Reserve's main policy rate, and the Bank of Japan's, and the Bank of England's.
Australia's central bank has been pursuing a policy of interest rate rises in recent months, and increased base rates by a quarter of a percentage point to 6.25% in November in a bid to keep a lid on inflation.
The local currency hit a 10-month low and bond prices fell to their lowest in two weeks as markets were expecting the Reserve Bank of India to cut its policy lending rate at its June 17 meeting to help boost economic growth that has slowed to its weakest pace in a decade.
Since it moved to unlimited fixed-rate funding, the central bank has been content to allow the overnight rate to drift much lower than the policy rate.
Government bond prices edged higher, reflecting increasing market bets on a rate cut at the central bank's next policy review on Tuesday.
The Bank of Japan may readopt the controversial zero interest rate policy in an effort to boost the country's ailing economy, governor Masaru Hayami has said.
It was shoved back into recession partly by its own policies: an ill-timed tax increase in 1997 and the (temporary) ending of the Bank of Japan's zero-interest-rate policy in 2000.
Financial repression occurs when Central Bank policy drives interest rates well below the inflation rate.
The bank's rate-setting council knew it was tightening policy during a sticky period for the economy.
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The central bank's monetary policy targets the federal-funds rate, which banks charge each other on overnight loans.
One thing, generally accepted, is that the Bank of England Monetary Policy Committee's next interest rate intervention will be to lower them, as part of a worldwide move to lower rates.
After cutting its policy rate on May 3, the central bank warned that it saw little room for further reductions as inflation was high.
Many argue that the European Central Bank's decision on April 7th to raise the policy rate in the euro area, and the prospect of further rises to come, has reinvigorated the carry trade.
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