Distinct opportunity for economy growth
A few days I began to perceive a distinct opportunity for growth impulsive Indonesian government bond interest rates and the Philippines. The two corresponding central banks refuse to take the first step towards a normalization of monetary conditions, although inflationary pressures are becoming clearer. Friday I opened a bet against the Indonesian rupiah and the peso against the U.S. dollar Tagalog, positioning which works like "proxy" for additional growth and impulsive event of the government bond interest rates in the two emerging Asian economies. Also Friday, government bond markets in Indonesia and the Philippines has fallen outstanding quotations. Indonesian bond interest maturing in 10 years has exploded by nearly a percentage point to 9.79% (still below the Average for the period 2003 - 2010, which is about 11%). Interest Philippine bond with the same maturity had a similar evolution, the displayed at the end of Friday being 7.78%. Impulsive advance the interest, but has not been as severely felt in the local exchange. It is likely that the two central banks intervened to support the rupiah and the peso. At the opening of U.S. trading session on Friday we decided to diversify my exposure also betting on further depreciation of the stock market quotes from Jakarta. Although last year signaled its monetary policy normalization constant intention, on December 16, Turkey's central bank cut interest rates by 0.5 percentage points, from 7% to 6.5%. The official indicated the motivation was to prevent speculative capital additional inputs, the central bank's unexpected action was also intended to reduce the depreciation of its currency and trade deficit. A day later, on December 17, the central bank raised the bank reserve ratio requirement by two percentage points, from 6% to 8% for the combined effect of the second adjustment is a local normalization of monetary conditions. Thursday, however, the central bank announced a new Key rate cut, this time by 0.25 percentage points from 6.5% to 6.25%. Markets were waiting Friday to see "the change" an additional increase in the reserve ratio, but it did not come. Some sources speak as a decision in this regard will be taken today. The experiment described above is less unusual than other central banks monetary approaches, those in developed economies in particular. Problem is that this experiment is done in a period when the pressures and deepening inflationary expectations seem to become a topic of speculation. What's happening right now in government bond markets of Indonesia and the Philippines is indicative in this respect. Although inflation rate in December was 6.4%, the lowest level since last year, the central bank indicated Thursday that it expects a "significant decline" in prices during this month, Turkey (like Indonesia) has unfortunate precedent in this chapter.