Taglio dei tassi da parte della Banca centrale islandese, molto robusto, visto che da un lato l'inflazione cala rapidamente, dall'altro il paese vedrà il PIL 2009 contrarsi dell'11% (forecast rivisto in peggioramento rispetto al precedente 9% di gennaio), per cui il paese ha un drammatico bisogno di abbassare il costo del denaro.
Tutto questo non giova ai corsi dell'ISK, che sul mercato interbancario (non accessibile al retail) starebbe attorno ai 170 contro euro.
L'intenzione degli islandesi è di continuare a tagliare man mano che l'inflazione cala, per cui prevedono (loro, poi è da vedere come andrà) che l'ISK si attesti contro euro attorno a 150 nel 2010 e a 145 nel 2011. per il retail sposta poco finché tali corsi (o anche quelli attuali) risulteranno indisponibili.
PS: Se veramente gli investitori impazienti di uscire dall'ISK detengono 25.005 mld ISK in asset islandesi, sono guai davvero.
Deeper and faster Central Bank policy rate cuts
This morning the Central Bank of Iceland (CBI) cut its policy rate by 2.5 percentage points to 13%. The cut was considerably larger than consensus forecasts; our own prediction was a 1.5 percentage point cut. It is worth noting that the Bank cut the interest rate paid on deposits by 3 percentage points. Since short-term interest rates in the financial system are currently based primarily on CBI deposit rates rather than on the policy rate itself, the rate decrease in this instance could in fact be said to be 3 percentage points. Deposit interest on the money market has already fallen today and the one-week interbank rate is now 9.25%.
Forecast continuing ISK weakness
At an analysts' meeting this morning, CBI spokesmen expressed the opinion that the objective of stabilising the ISK had been achieved for the most part YtD. In the medium term, the Bank expects ISK appreciation, although its forecast is now considerably less optimistic than in January. The CBI now expects the ISK exchange rate against the EUR to remain roughly at its current level until well into the autumn, then strengthen after that, with the EUR averaging ISK 150 in 2010 and ISK 145 in 2011. The principal grounds for the altered ISK outlook, in the Bank´s opinion, are less favourable terms of foreign trade, in particular, due to price decreases for aluminium and marine products.
Expect a sizeable rate cut in June?
In this instance the Monetary Policy Committee (MPC) was less equivocal than previously in its statements and the prospects for upcoming CBI policy rate decisions. The MPC states that if ISK development continues favourable, together with progress on the fiscal scene, another significant adjustment to the policy rate can be expected on its next rate announcement date on 4 June. After that, the most likely scenario is a more gradual series of downward rate adjustments. This is noteworthy in view of the fact that substantial changes may occur to the MPC prior to the next interest rate decision. On the other hand, expectations of an ample rate cut in coming weeks are more than welcome for businesses and households struggling with high financing costs at the same time as their income situation has often deteriorated markedly.
Outlook for less pressure on the ISK
The CBI has been estimating foreign investors´ short-term positions and attempted to analyse them according to their level of patience. Applying this measure leads the bank to conclude that the assets of impatient foreign investors amount to around 40% of total assets of foreign investors in securities and deposits in Icelandic banks, or the equivalent of around ISK 25005 billion. This is a considerably lower figure than has generally been suggested and, if the bank´s estimates are correct, should mean accordingly lower pressure on the ISK upon removal of currency controls. The CBI does not, however, regard it as advisable to remove the controls yet, but expresses the hope that actions now underway aimed at enabling the most impatient investors to exit their ISK positions, together with further clarity about balance of payments prospects and progress in the economic recovery programme agreed by the government and the IMF, should enable the eventual relaxation of currency controls. Under the current conditions, the CB regards it as appropriate for the policy mix to shift towards fiscal tightening and monetary easing