monetary policy committee · 4/28/2014 · 14-apr-14 ukraine 300 9.50% 3.40 mar-14 6.10% 2.8 7.9...
TRANSCRIPT
Financial Markets Developments
J. Pandoo
Head - Financial Markets Operations Division
28 April 2014
Monetary Policy Committee
© Bank of Mauritius
Volatility Indices
2
© Bank of Mauritius 3
2-Year Yields in Selected European Countries
© Bank of Mauritius
10-Year Yields in Selected Countries
4
© Bank of Mauritius
10-Year Bond Spreads to German Bunds
5
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Exchange Rate Developments
6
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Movements of EUR & GBP against USD
7
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Exchange Rate Movements
8
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Exchange Rate of Selected Currencies vis-à-vis the US Dollar
9
© Bank of Mauritius
Exchange Rate of Selected Currencies vis-à-vis the Euro
10
© Bank of Mauritius
Bloomberg Spot Forecast: EURUSD & GBPUSD
11
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Exchange Rate Outlook
International
• The relative growth outlook is improving in US and UK compared to that in the Euro zone. The Fed and the BoE are expected to hike interest rate next year while more accommodative monetary policies are expected by the ECB. This set the scene for a USD and GBP uptrend and a Euro downtrend.
Domestic
• The evolution of the rupee exchange rate is expected to be conditioned by developments in major currency markets as well as by domestic demand and supply factors
12
© Bank of Mauritius 13
Money Market
© Bank of Mauritius
Banks Excess Reserves
14
-1,000
1,000
3,000
5,000
7,000
9,000
11,000
13,000
15,000
Ap
r-13
May-1
3
Ju
n-1
3
Ju
l-13
Au
g-1
3
Sep
-13
Oct
-13
Nov-1
3
Dec-
13
Jan
-14
Feb
-14
Mar-1
4
Ap
r-14
Total Closing Excess Reserves Rupee Closing Excess Reserves
Rs million
© Bank of Mauritius
Issuance of BOM Instruments & Banks’ Excess Reserves (Rs bn)
15
© Bank of Mauritius
Projection of Banks’ Excess Reserves (Rs bn)
16
© Bank of Mauritius
BoM Securities: Issuance and Maturing
17
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Au
g-1
2
Sep
-12
Oct
-12
Nov-1
2
Dec-
12
Jan
-13
Feb
-13
Mar-1
3
Ap
r-13
Ma
y-1
3
Ju
n-1
3
Ju
l-13
Au
g-1
3
Sep
-13
Oct
-13
Nov-1
3
Dec-
13
Jan
-14
Feb
-14
Mar-1
4
Ap
r-14
BoM Bills Matured BoM Notes Matured BoM Bills Issued
BoM Notes Issued 5-YR BoM Bonds Issued 15-YR BoM Bonds Issued
Rs million
© Bank of Mauritius
Weighted Yield on T-Bills & T-Notes
18
1.5
1.8
2.1
2.4
2.7
3.0
3.3
3.6
3.9
4.2
4.5
4.8
5.1
5.4
5.7
6.0
6.3
6.6
6.9
7.2
1.5
1.8
2.1
2.4
2.7
3.0
3.3
3.6
3.9
4.2
4.5
4.8
5.1
5.4
5.7
6.0
6.3
6.6
6.9
7.2
Jul-
10A
ug-
10S
ep-1
0O
ct-1
0N
ov-1
0D
ec-1
0Ja
n-1
1F
eb-1
1M
ar-1
1A
pr-
11M
ay-1
1Ju
n-11
Jul-
11A
ug-
11S
ep-1
1O
ct-1
1N
ov-1
1D
ec-1
1Ja
n-1
2F
eb-1
2M
ar-1
2A
pr-
12M
ay-1
2Ju
n-12
Jul-
12A
ug-
12S
ep-1
2O
ct-1
2N
ov-1
2D
ec-1
2Ja
n-1
3F
eb-1
3M
ar-1
3A
pr-
13M
ay-1
3Ju
n-13
Jul-
13A
ug-
13S
ep-1
3O
ct-1
3N
ov-1
3D
ec-1
3Ja
n-1
4F
eb-1
4M
ar-1
4A
pr-
14
Per cent
91-D GMTB 273-D GMTB Key Repo Rate
182-D GMTB 364-D GMTB 3-Yr Treasury Notes
Upper Bound of Corridor Lower Bound of Corridor
© Bank of Mauritius
Yields on Long-Term GoM Bonds
19
© Bank of Mauritius
3-Month Interest Rate Differentials
20
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6-Month Interest Rate Differentials
21
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12-Month Interest Rate Differentials
22
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BoM Intervention on Domestic Forex Market
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BoM External Assets
24
© Bank of Mauritius
Recent Policy Rate Cuts
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DATE COUNTRY Policy
Rate
Inflation
Rate
Ref.
Period
Real
Policy Int
GDP
Growth
Unemploy-
ment Rate
GNS Budget
Balance
General Govt
Gross Debt
CAB
MAURITIUS 4.65% 4.5 1
Mar-14 0.15% 3.7 7.7 13.0 -3.2 52.4 -9.1
25-Mar-14 Hungary 10 2.60% 0.10 Mar-14 2.50% 1.2 10.9 19.6 -3.4 80.3 1.8
13-Mar-14 Chile 25 4.00% 3.5 Mar-14 0.50% 0.4 6.6 21.2 -0.8 11.4 -3.6
12-Mar-14 Thailand 25 2.00% 2.11 Mar-14 -0.11% 4.2 0.7 30.5 -3.4 48.2 1.1
26-Feb-14 Albania 25 2.75% 2.20 Mar-14 0.55% 2.5 10.5 13.1 -3.3 62.4 -9.0
24-Feb-14 Israel 25 0.75% 1.30 Mar-14 -0.55% 3.9 6.5 21.3 -3.1 73.2 2.5
18-Feb-14 Chile 25 4.25% 3.50 Mar-14 0.75% 0.4 6.6 21.2 -0.8 11.4 -3.6
18-Feb-14 Hungary 15 2.70% 0.10 Mar-14 2.50% 1.2 10.9 19.6 -3.4 80.3 1.8
11-Feb-14 Armenia 25 7.50% 3.80 Mar-14 3.70% 4.1 18.0 22.3 -8.2 42.2 5.5
4-Feb-14 Romania 25 3.50% 1.04 Mar-14 2.46% 2.0 6.9 23.8 -1.7 36.6 -4.5 1 Year-on-Year inflation rate. # Except Mauritius.
Source: http://www.tradingeconomics.com; http://www.cbrates.com; The Economist.
IMF ESTIMATES for 2014 (Apr-14 WEO) #
Rate
Cut
(bps) (%) (%) (% of GDP)
© Bank of Mauritius
Recent Policy Rate Hikes
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DATE COUNTRY Policy
Rate
Inflation
Rate
Ref.
Period
Real
Policy Int
Rate
GDP
Growth
Unemploy-
ment Rate
GNS Budget
Balance
General Govt
Gross Debt
CAB
MAURITIUS 4.65% 4.5 1
Mar-14 0.15% 3.7 7.7 13.0 -3.2 52.4 -9.1
24-Apr-14 New Zealand 25 3.00% 1.50 Mar-14 1.50% 2.6 6.0 14.8 -0.5 37.9 -6.0
14-Apr-14 Ukraine 300 9.50% 3.40 Mar-14 6.10% 2.8 7.9 9.6 -5.4 43.6 -7.8
2-Apr-14 Brazil 25 11.00% 6.15 Mar-14 4.85% 4.0 6.5 15.3 -1.7 65.9 -3.2
13-Mar-14 New Zealand 25 2.75% 1.50 Mar-14 1.25% 2.6 6.0 14.8 -0.5 37.9 -6.0
3-Mar-14 Russia 150 7.00% 6.90 Mar-14 0.10% 3.8 5.5 28.2 -1.0 11.8 1.6
26-Feb-14 Brazil 25 10.75% 6.15 Mar-14 4.60% 4.0 6.5 15.3 -1.7 65.9 -3.2
12-Feb-14 Georgia 25 4.00% 3.50 Mar-14 0.50% 6.0 13.3 17.8 -1.6 31.1 -8.4
6-Feb-14 Ghana 200 18.00% 14.50 Mar-14 3.50% 6.8 NA 11.8 -8.7 56.1 -10.1
1 Year-on-Year inflation rate. # Except Mauritius.
Source: http://www.tradingeconomics.com; http://www.cbrates.com; The Economist.
Rate
Hike
(bps) (%) (%) (% of GDP)
IMF ESTIMATES for 2014 (Apr-14 WEO) #
© Bank of Mauritius
Forecast of Policy Interest Rates
27
(per cent)
Current Inflation
Official Rate
17-Apr-14Rate Jun-14 Sep-14 Dec-14 Mar-15 Jun-14 Sep-14 Dec-14 Mar-15
Global 2.35 2.35 2.35 2.35 2.38
Developed 0.32 0.34 0.33 0.33 0.35
Emerging 6.03 6.15 6.17 6.17 6.21
US 0.13 1.5 0.125 0.13 0.125 0.125 0.125 0.125 0.125 0.125
Euro area 0.25 0.5 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25
UK 0.50 1.6 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.75
Japan 0.05 1.5 - - - - 0.05 0.05 0.05 0.05
Canada 1.00 1.1 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Australia 2.50 2.7 2.50 2.25 2.25 2.50
New Zealand 3.00 1.5 3.25 3.25* 3.25 3.25 3.50
Brazil 11.00 6.2 11.25 11.25 11.25 11.75
Russia 7.00 6.9 7.00 6.75 6.50 6.25
India 8.00 8.3 8.00 8.25 8.50 8.50
China 6.00 2.4 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00
Indonesia 7.50 7.3 7.75 7.75 7.75 7.75
Malaysia 3.00 3.5 3.00 3.25 3.25 3.50
Thailand 2.00 2.1 2.00 2.00 2.00 2.25
Philippines 3.50 3.9 3.75 4.00 4.00 4.00
South Korea 2.50 1.3 2.50 2.50 2.50 2.75
Turkey 10.00 8.4 10.00 10.00 10.00 9.50
South Africa 5.50 5.9 5.75 6.00 6.00 6.25
* Latest.
REUTERS (16-Apr-14) JP MORGAN (17-Apr-14)
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Policy Interest Rates (%) – GDP Weighted (JP Morgan)
28
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Stock Market
Developments
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MSCI World, Emerging & Frontier Market Indices
30
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Developed Market Indices & SEMDEX
31
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Emerging Market Indices & SEMDEX
32
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Foreign Investment on Local Stock Market
33
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Stock Market Outlook
International
• Global market equities are expected to benefit from the sustainable growth and an improving sales and earnings outlook for companies in developed economies. However, possible future interest rate hikes in major economies can lead to risk aversion and affect equity markets.
Domestic • The local stock market is expected to maintain its uptrend in
tandem with global equities although profit-taking and any potential retreat by foreign investors may somewhat limit its gains.
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THANK YOU
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