India becomes the 21st central bank to cut rates this year.

Everyone is out of step with the Fed.  The strong dollar problem is intensifying.

From Reuters:

UPDATE 5-India's RBI surprises again with post-budget rate cut


Wed Mar 4, 2015 6:32am EST

* RBI cuts repo rate 25 basis points to 7.5 pct

* Second cut this year, embarked on easing cycle in January

* Both made outside of regular policy reviews, surprising markets

* Rajan says economic growth recovering steadily (Adds quotes from Rajan's teleconference)

By Rafael Nam and Neha Dasgupta

MUMBAI, March 4 (Reuters) - India's central bank unexpectedly lowered its policy rate for the second time this year on Wednesday, backing a government that is pushing to revive economic growth as inflation cools.

Although markets had broadly expected the Reserve Bank of India to reduce rates again after a cut in January, few had expected a move just days after the government unveiled a budget that took a slower path to lowering the fiscal deficit.

After cutting the policy repo rate by 25 basis points to 7.50 percent, RBI Governor Raghuram Rajan issued a statement citing his reasons for making the move a month before a scheduled policy review.

"Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the Reserve Bank to be pre-emptive in its policy action," he said.

The RBI embarked on an easing cycle on Jan. 15 with a quarter percentage point reduction that had also caught market off guard by taking place outside of a scheduled review.



The benefits have still to pass through to borrowers, however, as commercial banks have been hesitant about lowering their lending rate

China becomes the 20th central bank to cut rates so far in 2015

So do we still believe that the US Federal Reserve will raise rates this year?

At least Angola is keeping its sang froid.

Reuters: 

Angola's central bank leaves key interest rate unchanged at 9.0 pct

Feb 13 (Reuters) - Angola's central bank left its benchmark lending rate unchanged at 9.0 percent on Friday, saying this was appropriate to maintain price stability in the oil-dependent economy.

The Bank of Angola has kept the rate unchanged in Africa's second-biggest producer since raising it by 25 basis points in October last year. (Reporting by Mfuneko Toyana; Editing by James Macharia)

Currency Wars: Sweden cuts rates. 17th central bank to cut this year.

"Sweden Adopts Negative Rate, Launches QE. Sweden’s central bank cut its main interest rate into negative territory for the first time and announced a bond-buying program, joining a widening group of central banks trying out unconventional measures to battle low inflation. The Riksbank, the world’s oldest central bank, lowered its benchmark rate to minus 0.1% from zero and said it would buy government bonds worth 10 billion Swedish kronor ($1.2 billion)"  (WSJ)

Honduras Central Bank Cuts rates: I think that it's the 16th central bank to do so in 2015. (and the year is only 6 weeks old)

Meanwhile, in Istanbul:

"(Bloomberg) -- Global finance chiefs dismissed speculation the world is sliding toward a 1930s-style round of currency devaluations, indicating their acceptance of the dollar’s recent surge and declines in the euro and the yen. As talks of finance ministers and central bankers from the Group of 20 got under way in Istanbul, U.S. and European officials said recent exchange-rate fluctuations mirrored trends in economies rather than outright efforts to secure a competitive advantage to boost growth."

Honduras central bank to cut interest rate to 6.75 pct

TEGUCIGALPA Sat Feb 7, 2015 1:04pm EST

Feb 7 (Reuters) - The central bank of Honduras will lower its benchmark interest rate on Monday to 6.75 percent, the first cut in nearly three years, in a move aimed at accelerating economic growth, the bank's president said on Saturday.

The 25 basis point rate cut will be the first since May 2012, and comes at a time when monthly inflation fell for the first time since late 2008.

"This decision is largely due to both internal and external conditions that encourage us to allow a gradual reduction of the benchmark interest rate so that the country's economy is reactivated," said Marlon Tabora, the central bank's president.

The economy of the Central American country grew by 3.1 percent last year, and is expected to expand between 2.5 and 3.5 percent in 2015.

The central bank said January inflation fell 0.39 percent due mostly to falling fuel prices, the first drop in average prices since November 2008 when inflation fell by 0.2 percent.

The bank added that it expects the government's fiscal deficit to fall by 3.4 percent in 2015.

Last year, the deficit reached 4.9 percent of gross domestic product. (Reporting by Gustavo Palencia; Writing by David Alire Garcia; Editing by Alexander Smith)

Is Europe's economy perking up? The PMI's today were better than expected

EUROPE: January services purchasing managers’ indexes

–EUROZONE was 52.7 against 52.2 forecast and from 51.6 in December.

–FRANCE was 49.4 agaisnt 49.5 forecast and from 50.6 in December.

–GERMANY was 54.0 against 52.7 forecast and from 52.1 in December.

–ITALY was 51.2 against 50.0 forecast and from 49.4 in December.

–SPAIN was 56.7 from 54.3 in December.

–U.K. was 57.2 against 56.5 forecast and from 55.8 in December.

Sovereigns are in a peck of trouble

Euromoney's sovereign risk index is rising. This is surprising because easy money usually reduces sovereign risk. Special factors also come into play, like commodity prices and politics (e.g. Ukraine and Venezuela.)

The strong dollar is the unmentioned culprit in this analysis as many of these countries have US$ debt coming due.

By the way, the Russian Central Bank has just cut interest rates, bringing to 14 the number of CB who have eased policy in January. Would it be better to describe this as an avalanche or a tidal wave?