Date / GMT ACM Consensus Current Rate 20 Apr/07:30 Riksbank 1.75 1.75 1.50

		The Riksbank meets for its latest monetary policy meeting on Wednesday, and we concur with the majority of market participants looking for a 25bp hike to 1.75%. All 28 economists surveyed by Bloomberg share this view, prompted in large part by the government’s sanguine forecasts for 3.8% growth in 2012 and 3.6% in 2013, in addition to the above-target CPI levels that hit 2.9% YoY in March. The Riksbank inflation target is set at 2%, and in an effort to curb inflationary pressures the central bank has already tightened rates five times since last July. Although there is scope for further SEK appreciation on the back of this week’s meeting, we are wary that much of the Riksbank’s hawkishness has already been priced in, and there is a clear downside risk if the accompanying statement disappoints. Indeed, earlier this month, Deputy Governor Ekholm underlined that the most recent Riksbank forecasts suggested underlying inflation would undershoot the 2% target, and that there was scope for more expansionary policy – clearly leaning towards a pause in the current tightening cycle. A further headwind is the amount of SEK appreciation that has already occurred, and which is likely to reduce the amount of actual tightening that the central bank will need to do via rates.
20 Apr/07:30		BoT		2.75		2.75		2.50
		We are line with markets expectation that the BoT will hike rates 25 bp to 2.75%. The Thai Central Bank has clearly taken the strategy of front loading policy rates to head off accelerating inflation. To us, the BoT Governor Trairatvorakul statement that growth is “less of a concern so the risk balance is tilted toward inflation” is a clear signal that more hikes are coming. March Headline CPI rose 3.14% y/y from 2.87%, the fastest pace since August last year while the BoT barometer, the core price index, jumped 1.62% y/y from 1.42%. There is a well justified expectation that the government’s removal of subsidies used to offset spiraling commodity prices has shifted the economic risk to the inflation side of the equation. In addition, Prime Ministers Vejjajiva’s political motivated pledge to increase wages to offset the impact of higher costs, will undoubtedly keep policy makers up at night. Growth remains robust with our GDP expectations still around 4.5% for 2011 as demand for the agricultural sector & industrial materials exports will increase due to demand from Japan. Policymakers continue to view THB strength as a policy tool to battle imported inflation and we continue to look for further appreciation.
21 Apr/11:00		CBT		6.25		6.25		6.25
		It is universally expected that the Turkish Central Bank will leave its benchmark rate unchanged at a record low of 6.25%. Inflation had slid to an low of 3.99% in March prompting policy makers to rapidly slash rates to induce growth. However, the global landscape has changed radically spearheaded by commodity prices which now threatens to accelerate price pressure. Retiring Governor Yilmaz’s unorthodox strategy in December was to ramp up reserve requirement to 15% while still cutting policy rates, i.e. slowing consumer lending will discouraging capital inflows. Since then, the rapid economic expansion has stimulated consumer demand increasing the current account deficit to -6.1bn while Industrial production rose to 18.9% in January. While inflation pressures are mounting, policymakers will be satisfied to see if the early actions continue to have a damping effect, although we suspect the first hike to come on the 25th of May. Perhaps the larger focus will the retiring of Yilmaz and Deputy Erdem Basci will take the reins of the CBRT.