Bloomberg reports a rate cut from Canada's central bank on Tuesday.
The Bank of Canada cut its key lending rate to a record low, and said it plans to leave it there for more than a year because inflation will remain below its 2 percent target.
The target rate for overnight loans between commercial banks was reduced to 0.25 percent today, the lowest since the central bank was founded in 1934 and the lowest it can go, the bank said. Policy makers also kept the rate on overnight deposits from commercial banks at 0.25 percent, instead of the usual practice that would have reduced it to zero.
Sweden's central bank also lowered rates.
Sweden’s central bank, the world’s oldest, cut the benchmark interest rate to a record 0.5 percent and said it’s ready to take further steps to revitalize the Nordic region’s largest economy, mired in the worst recession in more than half a century.
The Stockholm-based Riksbank, founded in 1668, lowered the seven-day repo rate by half a percentage point, with one of the six policy makers voting for a three-quarter-point cut, the bank said on its Web site today. Twelve out of 21 economists in a Bloomberg survey forecast the size of the reduction.
India's central bank reduced interest rates for the sixth time in as many months.
The Reserve Bank of India cut the reverse repurchase rate to 3.25 percent from 3.5 percent, according to a statement in Mumbai today. Economic growth may ease to 6 percent in the year that started April 1 from 7.1 percent in the previous 12 months, the central bank said.
The rate cuts come even as confidence about the global economy has improved. For example, Bloomberg reports that German investor confidence rose in April.
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations rose to 13 from minus 3.5 in March. That’s the highest since June 2007 and the first positive reading since July 2007...
The improved confidence helped push up central European currencies on Tuesday, but the Wall Street Journal highlights a potential pick-up in the Asian carry trade as well.
An improved outlook for emerging economies and increased stability in nations with high-yielding currencies have investors wading back into carry-trade waters.
The currencies of economies with high interest rates are the most likely beneficiaries, according to Standard Chartered Bank. The Indonesian rupiah, the Indian rupee and the Philippine peso all could rise as a result.