Global banks are set to review monetary policies

A t least two dozen central banks around the world are scheduled to meet this month, according to Bloomberg data.

They will review monetary policy and adjust interest rates if necessary. The Bank of England meets today.Cees Bruggemans, First National Bank’s chief economist, said this week that it was expected to cut its base rate of 5 per cent by half a percentage point – and eventually reduce the rate “as low as 3 per cent next year”.The Bank of England cut its rate by a quarter of a percentage point in April and February, from 5,5 per cent in January, in an attempt to bring inflation, now at 4,7 per cent, down to its target ceiling of 2 per cent.Bruggemans said: “Also, the Fed [US Federal Reserve] seems ready to cut by 0,5 per cent later this month to 1,5 per cent, with another 0,5 per cent cut possible in early 2009.”The US has cut its rate sharply from a peak of 5,25 per cent a year ago, at the first signs that the subprime crisis would freeze interbank lending.The European Central Bank (ECB) has been reluctant to cut its 4,25 per cent rate after hiking from a low of 2,25 per cent at the end of 2005.It is grappling with an annual increase in the harmonised index of consumer prices running at 3,6 per cent, while its target is below 2 per cent.Bruggemans said: “General recession is now a reality” in Europe.He predicted this would prompt the ECB to cut interest rates soon, “going as low as 2,75 per cent next year”.Australia, which cut its rate on Tuesday by a full percentage point to 6 per cent, had been raising the benchmark rate since May 2002, when it was 4,25 per cent.Bloomberg said the central banks in Thailand and South Korea would also meet this week.Fed policy makers will meet on October 29 and the ECB is due to meet on November 6.Indonesia’s central bank On Tuesday swam against the tide, raising its key rate by a quarter of a percentage point to 9,5 per cent, according to Sapa-AP.The country is facing a massive liquidity shortage.- Business ReportThe Bank of England meets today.Cees Bruggemans, First National Bank’s chief economist, said this week that it was expected to cut its base rate of 5 per cent by half a percentage point – and eventually reduce the rate “as low as 3 per cent next year”.The Bank of England cut its rate by a quarter of a percentage point in April and February, from 5,5 per cent in January, in an attempt to bring inflation, now at 4,7 per cent, down to its target ceiling of 2 per cent.Bruggemans said: “Also, the Fed [US Federal Reserve] seems ready to cut by 0,5 per cent later this month to 1,5 per cent, with another 0,5 per cent cut possible in early 2009.”The US has cut its rate sharply from a peak of 5,25 per cent a year ago, at the first signs that the subprime crisis would freeze interbank lending.The European Central Bank (ECB) has been reluctant to cut its 4,25 per cent rate after hiking from a low of 2,25 per cent at the end of 2005.It is grappling with an annual increase in the harmonised index of consumer prices running at 3,6 per cent, while its target is below 2 per cent.Bruggemans said: “General recession is now a reality” in Europe.He predicted this would prompt the ECB to cut interest rates soon, “going as low as 2,75 per cent next year”.Australia, which cut its rate on Tuesday by a full percentage point to 6 per cent, had been raising the benchmark rate since May 2002, when it was 4,25 per cent.Bloomberg said the central banks in Thailand and South Korea would also meet this week.Fed policy makers will meet on October 29 and the ECB is due to meet on November 6.Indonesia’s central bank On Tuesday swam against the tide, raising its key rate by a quarter of a percentage point to 9,5 per cent, according to Sapa-AP.The country is facing a massive liquidity shortage.- Business Report