Markets Becoming More Wary of Central Banks

From Switzerland to Singapore, central banks around the world kept markets on their toes with unexpected policy moves January, and economists say the surprises aren’t going to stop there.

Last month alone, central banks in India, Egypt, Peru, Denmark, Canada and Russia announced surprise interest rate cuts. This came alongside Switzerland’s unanticipated decision to scrap its three-year-old cap on the franc and Singapore’s off-cycle move to tweak its exchange rate policy in order to ease the rise of the local currency.

On Wednesday, the People’s Bank of China surprised markets on Wednesday by cutting the reserve requirement ratio (RRR) by 50 basis points to 19.5 percent – its first country-wide RRR cut since May 2012.


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