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Weekly Lists
August 4, 2017 www.intellinews.com I Page 25
bne:Credit CEE monthly bond
wrap: summer slowdown is here
Czech rate setters take the plunge
The summer slowdown is here with bond issue volumes dropping off across the Central and Eastern Europe (CEE) region but still way ahead of last year’s results.
In Central Europe a total of $1.5bn new bonds were issued by only three entities: the Lithuanian power company Lietuvos Energija with a €300mn bond and two Polish banks Odea Bank and PKO Bank with $300mn and €750mn respectively. However, combined this was still about $500mn more than was issued a year ago in the same month, according to Cbonds data.
The Czech National Bank announced on August 3 that it will raise interest rates by 20bp to leave the benchmark at 0.25%, making it the first central bank in the EU to hike rates in the recovery business cycle.
The move has been the subject of no little debate in recent weeks, as the CNB has clearly been concerned by the progress of core inflation above its 2% target. There are signs that further hikes could be in the pipeline for later this year or in early 2018, but at the same time, the central bank struck a notably dovish tone at its press conference.
The hike in the benchmark is the first since February 2008, and breaks a run of close to five years during which rates have sat at virtually zero. The CNB board also decided to increase the Lombard rate by 25bp to 0.50% and keep the discount rate unchanged at 0.05%.
Mongolia’s “economy is rebounding, with GDP growth likely to reach 2 percent this year on the back of strong coal production
and exports, high private investment, and a return of confidence following the approval of the $5.5 billion IMF-led package”, the International Monetary Fund (IMF) team said on August 2 at the end of a visit to Mongolia.
An IMF staff team visited the country between May 24 and August 2 in order to access its ongoing $434mn Extended Fund Facility (EFF) arrangement with Mongolia. Under the programme, “fiscal results have been better than expected, supported by strong revenues and tight expenditure control,” the statement noted.
IMF releases first review of EFF arrangement with Mongolia