Ranking this week's policy statements by central banks

More than a dozen central banks published press statements after their policy decisions this week.
I ranked them, naturally very subjectively, by readability and by clarity of messages and reasoning behind a decision.


1. Norges Bank

Clear winner with its concise, five-para statement on a 25 basis point rate cut including nice quotes from Governor Øystein Olsen:

"Growth prospects for the Norwegian economy have weakened somewhat and inflation is expected to moderate further out. The Board has therefore decided to lower the key policy rate."
"The current outlook for the Norwegian economy suggests that the key policy rate may be reduced further in the course of the year."

2. Bank of England

Runner-up with a statement providing the outlook for future evolution of interest rates in a transparent fashion, even though MPC members felt tempted to hedge their bets:

... the MPC judged it appropriate to leave the stance of monetary policy unchanged. The MPC’s best collective judgement is that it is more likely than not that Bank Rate will need to increase over the forecast period to ensure inflation returns to the target in a sustainable fashion.
All members agree that, given the likely persistence of the headwinds weighing on the economy, when Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles. This guidance is an expectation, not a promise. The actual path Bank Rate will follow over the next few years will depend on the economic circumstances.

3. South African Reserve Bank

Bronze medalist with its informative statement on what led to its decision on a 25 basis point rate hike, after a tight 3-3 vote:

While the evolution of inflation expectations is critical, at this stage there is no clear evidence of a deterioration in longer-term inflation expectations, but they remain at an elevated level.
Given the upside risks to the inflation forecast and the protracted period of the expected breach, the MPC decided that further tightening was required to complement the previous moves... Three members favoured a 25 basis point increase while three members preferred no change. Ultimately the committee decided on an increase.

4. Swiss National Bank

Close fourth with its elaborate statement on maintaining its expansionary monetary policy:

The Swiss franc is still significantly overvalued. Negative interest is making Swiss franc investments less attractive. At the same time, the SNB will remain active in the foreign exchange market, in order to influence exchange rate developments where necessary.
The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market serve to ease pressure on the Swiss franc. The SNB’s monetary policy is thus helping to stabilise price developments and support economic activity.

5. Federal Reserve

Taking the fifth place for the FMOC's post-meeting statement with its usual code words. The language underlined the image of the data-driven Fed:

"The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate... However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data."

6. Bank of Japan

Complex, though still quite clear and very transparent statement, including detailed information on the votes on individual policy motions presented during policy deliberations:

The Bank will continue with "Quantitative and Qualitative Monetary Easing (QQE) with a Negative Interest Rate," aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will examine risks to economic activity and prices, and take additional easing measures in terms of three dimensions -- quantity, quality, and the interest rate -- if it is judged necessary for achieving the price stability target.

7. Bank Indonesia

Well-structured statement on a 25 basis point interest rate cut:

The move is consistent with greater room to ease monetary policy along with a solid macroeconomic stability, specifically indicated by the persistently less intense inflationary pressures in 2016 and 2017, while uncertainties in the global financial market decreased.
The Board of Governors will be cautious in determining future monetary easing, taking into account overall assessments and forecast of domestic macroeconomy and financial systems stability, as well as global economic developments.

Middle of the Pack

8. Central Bank of Iceland

Brief, just four-para statement with a hint on the rate outlook:

Global price developments and a stronger króna have provided the scope to raise interest rates more slowly than was previously considered necessary. However, this does not change the fact that, according to the Bank’s forecast, a tighter monetary stance will probably be needed in the coming term, in view of growing domestic inflationary pressures.

9. National Bank of Serbia

Another very brief statement, albeit revealing little about the reasoning for the decision to keep interest rates on hold:

The NBS maintains a cautious monetary policy stance since it was assessed that the current level of monetary policy expansiveness provides for a moderate rise in inflation from mid-year and its return within the target tolerance band late this or early next year.


10. Central Bank of Chile

Its statement on keeping interest rate on hold provided a lot of flexibility but not much specifics on the outlook:

The future path of the monetary policy rate considers measured adjustments aimed to ensure the convergence of inflation to the target, at a pace that will depend on incoming information and its implications on inflation. The Board reiterates its commitment to conduct monetary policy with flexibility, so that projected inflation stands at 3% over the policy horizon.

11. Central Bank of Egypt

Following a switch to a more flexible exchange rate regime announced earlier this week, its statement commented on a 150 basis point rate hike, but lacked specifics on factors influencing policy considerations going forward:

The CBE’s monetary policy will be geared towards maintaining price stability by avoiding double digit inflation rates over the medium-term to maintain real incomes.
The MPC judges that a rate hike is warranted to anchor inflation expectations. The MPC reiterates its price stability mandate and will continue to closely monitor all economic developments, particularly fiscal policy and its effect on the inflation outlook, and will not hesitate to adjust the key CBE rates to ensure price stability over the medium-term.

12. National Bank of Kazakhstan

Nothing specific about factors weighed by policymakers in the statement titled "On the base rate":

The decision on the base rate was made taking into account risks for price stability, financial stability and economic growth outlook. Keeping the base rate at the same level in terms of economic slowdown indicates the necessity to ensure the demand for tenge assets.

13. Bank of Mozambique

Plenty of backward-looking statistics and basically no policy message in its long statement (available only in Portugese on top of that) warrants this ranking at the very end of the pack:

In the domestic environment, the agency noted the likely impacts of natural weather plaguing the country which, together with the political and military tension that hinders the free movement of people and goods throughout the country, will affect the macroeconomic targets set for 2016 including growth forecasts of GDP and inflation.