Central Banks Monitor

Monitor the latest developments of central banks of the largest economies in the world using MacroVar's data analytics, real-time economic calendar and central banks news monitor.

CountryCodeLatest %YoYCycle #Rate Trend (5 years)Balance SheetB/S YoY%B/S Trend (5 years)
United StatesUS5,505,25527.258.970-12,97
Euro AreaEA4,253,75-16.534.520-9,49
Czech RepublicCZ5,257,00-13.461.64014,73
South AfricaZA8,258,25441.238.9506,44
New ZealandNZ5,505,254984.798-10,24
Hong KongHK5,755,5037
South KoreaKR8,258,2544512.231-13,26

Central Banks Calendar

Central Banks News

2024-07-16 10:04 Italian CPI June 2024 Report
2024-07-16 10:03 Italy cpi
2024-07-16 10:03 ECB Survey: banks reported a small net tightening of corporate credit standards & moderate easing for mortgages.
2024-07-16 10:02 ECB: Banks saw corporate loan demand fall at a slower pace.
2024-07-16 10:02 Italian HICP Final MoM Actual 0.2% (Forecast -, Previous 0.2%)
2024-07-16 10:02 ECB Survey: In Q3, banks expect further tightening of corporate credit standards but see no change for households.

Central Bank's Role in Monetary Policy

Interest Rates

1. Policy Interest Rates

  • Definition: Central banks set the policy interest rate, which is the rate at which they lend to commercial banks. This rate influences other interest rates in the economy, including those for loans and deposits.
  • Mechanism: By changing the policy rate, central banks can influence economic activity.
    • Lowering Interest Rates: When a central bank lowers interest rates, borrowing becomes cheaper, encouraging businesses and consumers to take loans and spend more, which can stimulate economic growth.
    • Raising Interest Rates: Conversely, when the central bank raises interest rates, borrowing becomes more expensive, which can slow down spending and investment, helping to control inflation.

2. Forward Guidance

  • Definition: This is a communication strategy used by central banks to influence expectations about future interest rates.
  • Mechanism: By providing guidance on the future path of interest rates, central banks can shape economic expectations and behavior. For instance, if a central bank signals that rates will remain low for an extended period, it can encourage spending and investment.

Balance Sheet Operations

1. Open Market Operations (OMOs)

  • Definition: These are the buying and selling of government securities in the open market to regulate the supply of money.
  • Mechanism:
    • Buying Securities: When a central bank buys government securities, it adds money to the banking system, increasing liquidity and encouraging lending and investment.
    • Selling Securities: When it sells securities, it takes money out of circulation, reducing liquidity and potentially slowing down economic activity.

2. Quantitative Easing (QE)

  • Definition: QE is a type of monetary policy where a central bank purchases longer-term securities from the open market to increase the money supply and encourage lending and investment.
  • Mechanism: By buying assets such as government bonds, mortgage-backed securities, and other financial instruments, the central bank increases the reserves of banks, encouraging them to lend more. This is typically used when conventional monetary policy (like lowering interest rates) is not sufficient, especially when interest rates are already near zero.

3. Balance Sheet Composition

  • Definition: The central bank’s balance sheet consists of its assets and liabilities, and the composition of these can influence monetary policy.
  • Mechanism: By holding different types of assets (e.g., government bonds, mortgage-backed securities), the central bank can influence specific sectors of the economy. For example, purchasing mortgage-backed securities can specifically target the housing market.

Objectives of Using Interest Rates and Balance Sheet

1. Inflation Control

  • Central banks aim to keep inflation within a target range. By adjusting interest rates and using balance sheet operations, they can influence demand in the economy, helping to control price levels.

2. Employment and Economic Growth

  • Central banks also aim to achieve maximum sustainable employment. Lowering interest rates and increasing the money supply can stimulate economic growth and reduce unemployment.

3. Financial Stability

  • Through their policies, central banks strive to maintain stability in the financial system. This includes managing liquidity in the banking system and ensuring that financial institutions operate smoothly.