20 Central Banks Have Cut Rates In 2015 After "Surprise" Rate Cut By Israel To Record Low 0.1%

Tyler Durden's picture

Last week it was 19 central banks (including the ECB which accounts for 19 nations) which had cut rates in 2015, mostly in "surprise", unexpected easing decisions. Moments ago the number became 20 when the Israel central bank just cut its interest rate by 0.15% to 0.1%, the lowest on record, a move which once again caught the market by surprise as only 3 of 23 analysts had predicted it.

Here is the decision from the Israel Central Bank, which may or may not be buying more shares of AAPL at the ATH:

The decision to reduce the interest rate for March 2015 by 0.15 percentage points, to 0.10 percent is consistent with the Bank of Israel's monetary policy, which is intended to return the inflation rate to within the price stability target of 1–3 percent a year over the next twelve months, and to support growth while maintaining financial stability. The path of the interest rate in the future depends on developments in the inflation environment, growth in Israel and in the global economy, the monetary policies of major central banks, and developments in the exchange rate of the shekel.


The following are the main considerations underlying the decision:

  • The CPI declined by 0.9 percent in January, against the background of a decline in energy prices, a scheduled reduction in water prices, and a relatively sharp decline in the housing component. The rate of inflation as measured over the past 12 months was negative 0.5 percent, as the decline in energy prices had a direct effect of reducing the CPI by 0.7 percent. The one-off reduction in electricity prices is expected to contribute -0.3 percent to the CPI for February. After the January CPI was published, short term inflation expectations from all sources remained below the target range, and there was a slight decline in longer term expectations toward the midpoint of the target range.
  • In the fourth quarter the increase in the employment and labor force participation rates continued, as did the decline in the unemployment rate and the increase in the number of job vacancies. The high rate of growth in the fourth quarter came against the background of the recovery from the effects of Operation Protective Edge, and primarily reflected growth in public consumption, and growth in exports that continued in January as well in view of the cumulative depreciation since August. Tax revenues continued to increase in January, at a rate similar to that of recent months.
  • This month, the shekel continued its appreciation, strengthening by 2.6 percent against the dollar, and by 3.3 percent in terms of the nominal effective exchange rate. After a depreciation of 10.4 percent between August and December in the effective exchange rate, there has been an appreciation of 7.6 percent since December, so that the cumulative depreciation since August has only been 2 percent. Continued appreciation is liable to weigh on growth in the tradable industries—exports and import substitutes.
  • Inflation rates in major markets continue to decline to very low levels, and this month various central banks implemented additional monetary easing measures. In the US, growth was slightly more moderate than expected, and there is uncertainty regarding the date that the federal funds rate will begin to be raised there.
  • In the fourth quarter, there was an increase of 22 percent in housing market transactions, consisting of purchases by young couples and by buyers upgrading their homes, while the number of transactions involving investors remains stable. The moderate decline in the number of new homes for sale continues, and the rate of mortgages being taken out remains high. Corporate bond market spreads increased slightly this month, but they remain low.

The Monetary Committee is of the opinion that in view of the increased rate of appreciation, and its possible effects on activity and inflation, reducing the interest rate to 0.1 percent is the most appropriate step at this time in order to support achieving the policy targets.

* * *

For those asking, here is the full, updated list of 20 central banks easing so far in 2015 courtesy of Reuters:


Uzbekistan's central bank cuts its refinancing rate to 9 percent from 10 percent.

2. Jan. 7/Feb. 4 ROMANIA

Romania's central bank cuts its key interest rate by a total of 50 basis points, taking it to a new record low of 2.25 percent. Most analysts polled by Reuters had expected the latest cut.


The Swiss National Bank stuns markets by scrapping the franc's three-year-old exchange rate cap to the euro, leading to an unprecedented surge in the currency. This de facto tightening, however, is in part offset by a cut in the interest rate on certain sight deposit account balances by 0.5 percentage points to -0.75 percent.

4. Jan. 15 INDIA

The Reserve Bank of India surprises markets with a 25 basis point cut in rates to 7.75 percent and signals it could lower them further, amid signs of cooling inflation and growth struggling to recover from its weakest levels since the 1980s.

5. Jan. 15 EGYPT

Egypt's central bank makes a surprise 50 basis point cut in its main interest rates, reducing the overnight deposit and lending rates to 8.75 and 9.75 percent, respectively.

6. Jan. 16 PERU

Peru's central bank surprises the market with a cut in its benchmark interest rate to 3.25 percent from 3.5 percent after the country posts its worst monthly economic expansion since 2009.

7. Jan. 20 TURKEY

Turkey's central bank lowers its main interest rate, but draws heavy criticism from government ministers who say the 50 basis point cut, five months before a parliamentary election, is not enough to support growth.

8. Jan. 21 CANADA

The Bank of Canada shocks markets by cutting interest rates to 0.75 percent from 1 percent, where it had been since September 2010, ending the longest period of unchanged rates in Canada since 1950.


The ECB launches a government bond-buying programme which will pump over a trillion euros into a sagging economy starting in March and running through to September next year, and perhaps beyond.

10. Jan. 24 PAKISTAN

Pakistan's central bank cuts its key discount rate to 8.5 percent from 9.5 percent, citing lower inflationary pressure due to falling global oil prices. Central Bank Governor Ashraf Wathra says the new rate will be in place for two months, until the next central bank meeting to discuss further policy.

11. Jan. 28 SINGAPORE

The Monetary Authority of Singapore unexpectedly eases policy, saying in an unscheduled policy statement that it will reduce the slope of its policy band for the Singapore dollar because the inflation outlook has "shifted significantly" since its last review in October 2014.

12. Jan. 28 ALBANIA
Albania's central bank cuts its benchmark interest rate to a record low 2 percent. This follows three rate cuts last year, the most recent in November.

13. Jan. 30 RUSSIA
Russia's central bank unexpectedly cuts its one-week minimum auction repo rate by two percentage points to 15 percent, a little over a month after raising it by 6.5 points to 17 percent, as fears of recession mount following the fall in global oil prices and Western sanctions over the Ukraine crisis.

14. Feb. 3 AUSTRALIA
The Reserve Bank of Australia cuts its cash rate to an all-time low of 2.25 percent, seeking to spur a sluggish economy while keeping downward pressure on the local dollar.

15. Feb. 4 CHINA
China's central bank makes a system-wide cut to bank reserve requirements -- its first in more than two years -- to unleash a flood of liquidity to fight off economic slowdown and looming deflation.

16. Jan. 19/22/29/Feb. 5 DENMARK
The Danish central bank cuts interest rates a remarkable four times in less than three weeks, and intervenes regularly in the currency market to keep the crown within the narrow range of its peg to the euro.

17. Feb. 13 SWEDEN
Sweden's central bank cut its key repo rate to -0.1 percent from zero where it had been since October, and said it would buy 10 billion Swedish crowns worth of bonds

18. February 17, INDONESIA
Indonesia’s central bank unexpectedly cut its main interest rate for the first time in three years

19. February 18, BOTSWANA
The Bank of Botswana reduced its benchmark interest rate for the first time in more than a year to help support the economy as inflation pressures ease.
The rate was cut by 1 percentage point to 6.5 percent, the first adjustment since Oct. 2013, the central bank said in an e-mailed statement on Wednesday.

20. February 23, ISRAEL

The Bank of Israel reduced its interest rate by 0.15 percentage points, to 0.10 percent in order to stimulate a return of the inflation rate to within the price stability target of 1–3 percent a year over the next twelve months, and to support growth while maintaining financial stability.

* *  *

So why is the entire world rushing in a currency war to the bottom? Simple: because as we have been warning for months, and as Goldman finally admitted last week, the world can no longer avoid the fact that it is in a global recession.

Meanwhile, we can't wait for the US to hike rates this summer...

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yogibear's picture

Round-robin rate cuts and buying each other's debts with printed currencies.

Russia didn't want to play the the game so their being severly punished.

GetZeeGold's picture



Don't think for a second we won't raise rates......if we freakin feel like it.

tarsubil's picture

We can quit anytime we want.

Temporalist's picture

This reminds me of the age old question that adults ask children: "if your friend jumped off a building would you?"  Clearly all the central bankers were "YES!" types of children.

HonkyShogun's picture
HonkyShogun (not verified) yogibear Feb 23, 2015 9:42 AM

The Bank of Israel will never go to negative rates, just on principle.

Trogdor's picture

Yeah .... man ... when the Jews cut interest rates, you KNOW temps are getting pretty frosty in Hell ....

sessinpo's picture

yogibear    Round-robin rate cuts and buying each other's debts with printed currencies. Russia didn't want to play the the game so their being severly punished.


I guessed you missed number 13 where Russia reduced interest rates, so Russia is playing the game. It's a game of fighting deflation by making money cheaper. Russia's bet is the the curent fiat will become worthless, thus their investment in gold. The fallacy is to think that even gold can't go down in value.

But quite frankly, market forces such as deflation or inflation eventually are more powerful then an indivual country's attempt at control. In the end we all get punished for the mal investment backed by governments around the world.

Calculus99's picture

Don;t forget that Mark Carney is on his second job as head of a Central Bank. I think he's been a head for around 7-8 years. 

In that time he's never once raised rates!

oudinot's picture

Mark Carney is a smart man from the Northwest Territories (the north of nowhere in Canada) from a poor family.

By all accounts he was a fine man till he got hired and began  to work for Goldman.

By the way you are correct, Carney Squid never raised rates in Canada or UK as  but he did threaten to while being head of the  English Central Bank about a year ago, but has backpedalled since....

Leveraged Algorithm's picture

Pure depreciation......Mr. Yellen will correct this perception with Congress.....

ejmoosa's picture

Welcome to the Greater Recession of 2015.


It will be greater, because there is simply no demand left to stimulate with low rates.

LawsofPhysics's picture

While I ahve been debt-free for a long time, I may consider taking out a billion dollar loan once rates go negative and these fuckers pay me to do so...


Pool Shark's picture




Silly LoP! NIRP's are for Squids!


Only the Primary Dealers and Investment Banks get free money.

Lowly consumers get 30% payday loans and 15% credit card rates...


sessinpo's picture

LawsofPhysics  While I ahve been debt-free for a long time, I may consider taking out a billion dollar loan once rates go negative and these fuckers pay me to do so...



I'm curious as to where you would park that $1 billion dollar loan. If you put in a bank, you will ean a negative interest rate, thus you get sum zero.

Most investments including commodities (including PMs) and real estate should decline if the coming environment is of a historical deflationary environment. So again you won't see a net gain.

Might I suggest from a historical perspective that in a deflationary environment, PM mining companies do okay, odd as it may seem. I suppose that those mining companies do well because of the war that comes afterwards which require those metals.

chinoslims's picture

No silly.  You take your billion dollars and invest it in Mexican thugs and create your own drug cartel.  Create novel drug distribution networks through technology.  Create a drone transportation network Maybe.  Find interesting money laundering techniques.   I think drug dealing is the last frontier of something remotely close to a free market.  So many imaginative ways have been devised to provide a good (narcotics) to people who want it.

malek's picture

You still didn't get the memo?
By definition, the government is the most successful crime syndicate: they can even write their own laws and make all people follow them, by force.

So if anything, you take the 1 billion and form think tanks, advisor groups, and lobbyists to first influence and then slowly take over a group of "politicians" (actually thugs) to write the laws you want to have.

Theta_Burn's picture

We have been QE'ing FOR Israel since its inception..

I didn't realize they were such an import/export power house that they even need to consider this stupidity..


Cannon Fodder's picture

Can someone help me understand what this means for the US central bank? If "everyone else is doing it" does that mean the US cuts rates again at some point? But doesn't that mean the market just keeps going up?

Why do all these countries cut rates? Is it to stimulate growth because of a recession or is it because of trying not to have a strong currency?


Ghordius's picture

nothing. whatever happens in the monetary world, the FED is usually the first in the pack, and the others follow, with a lag. both reasons, and the mighty rush of USDs going home, too

JRobby's picture

The world economy is heating up so fast that rate cuts were in order.


Theta_Burn's picture

Yeah, but what does Israel export besides confiscated Palestinian olivewood tree carvings, artillery systems, and terrorists to warrant this?

JRobby's picture

Some tech products. Not much percentage of world total.

At this point why would any nation's industrial output, fiscal policies & stability (or lack there of) have any inpact on currency markets that are totally manipulated?

Cogito's picture

You'd be surprised. Israel actually has rather robust export activities, as evidenced by a significant current account surplus (appx. 4% of GDP) and the shekel being one of the world's strongest currencies in the past decade. This has required the bank of Israel to constantly intervene in the FX market in the past several years to prevent further appreciation of the currency.

Major exports include hi-tech services (software development, engineering services), pharmaceuticals, machined tools, electronics and communication gear, defense goods and chemicals.

As for "confiscated olivewood tree carvings"... Exports of products by Israel of items originating in the Palestinian territories constitutes a very tiny portion of it's overall exports, much of it due to very strict origin labeling requirements the EU has imposed in this matter.

disabledvet's picture

Here come the sappers....

Hubbs's picture

Central Banks have consolidated their power over the people to the point that there will be an across the board NIRP for all deposits at the rate we are going.

I am surprised that people are not flocking to gold, which if held physically, has no storage costs. In contrast,  it will soon cost you to "store" your fiat currency in banks.

Why are banks screwing us up the ass? Because they can!



wstrub's picture

If central banks REALLY wanted inflation, they would be buying ALL commodities across the spectrum.

chinoslims's picture

Take all the commodities bought.  Dig a giant ditch, put the commodity in the ditch and light it on fire.  That would be easy to do with oil.  Then, repeat the process.  You understand how much of a Keynesian fantasy that would be.  Do you understand how money jobs that would create?    2% inflation achieved and plenty of jobs to go aroundThis would work real well because the academics have found it successful in their economic models.  /sarc

Seasmoke's picture

Bullish for Soda Stream. 


khaproperty's picture

For the big shots its the currency war to support exports and own economy. All the others still have to fight the released problems (especially BRICS) which US$-and other carrytrades caused in their country - first coming in and double it when going out. Nobody will win this global fight. We all will be loosers finally.

bubbleburster's picture

This just in: it's a Rothschild conspiracy gone wild.  The Kingsmakers who control the Central Bank of Israel (read: Zionistan) have lowered interest rates, thus pulling the carpet out from under the feet of all those dumb goyim.  The quesiton that remains on everyones lips: who is catering the after event party?