Ezra Dweck’s Post

The RBI’s draft guidelines, effective April 1, 2025, propose computation changes to the LCR calculation. These guidelines can strengthen banks’ resilience against sudden deposit outflows. However, they may initially lower reported LCRs. This is due to higher stress factors and will require banks to rebuild their liquidity buffers. Learn more about the implications of these proposed changes in the latest #CRISILPerspective: https://lnkd.in/dMzFaTd2 Subha Sri Narayanan   #RBIDraftGuidelines #LCRChanges #LiquidityCoverageRatio #LCRcalculation

Yesterday's decision by the RBNZ to cut the OCR by 0.25% to 5.25% caught some market commentators off guard, especially after previous statements indicated that rate cuts were not expected until early 2025. This move appears to signal the beginning of an OCR reduction cycle that the RBNZ plans to manage over the next 12-24 months. It will be intriguing to observe how the major banks respond, particularly in adjusting both their lending and deposit rates. In a declining OCR environment, banks face the challenge of balancing lower lending rates without significantly reducing deposit rates. For savers and term deposit investors, timing will be crucial in deciding where to place their funds. Those who are strategic will seek out premium rates to lock in before further reductions in deposit account rates occur.   Check out Xceda’s premium deposit rates for Savings and Term Deposit Accounts at: https://lnkd.in/gEbnvsZd   Here is a link to the RBNZ website with all the information you need - https://lnkd.in/gt__534P   #termdeposits #savingsaccounts #neobanks #digitalbanks

Westpac-RBNZ to deliver some pre-Xmas cheer in November. We now expect the RBNZ to cut the OCR by 25 bp at the November Monetary Policy Statement. Thereafter we expect 25 bp cuts at each of the first three meetings of 2025 (February, April, and May) which will take the OCR to 4.5% by mid-2025. Thereafter we think the RBNZ will take a more cautious data dependent approach and reduce the OCR in 25 bp increments at the August and November 2025 Monetary Policy Statements bringing the OCR to 4% by end 2025. We see a final easing to 3.75% in early 2026 where we see the terminal rate. This profile brings forward our previous OCR profile by around 6 months. #ocr #interestrates #inflation #realestate #recession #fx

The Federal Reserve’s recent decision to cut the federal funds rate by 50 basis points has provided some much-needed optimism within the banking sector, following a challenging second-quarter earnings season. The market reaction was immediate, with the KBW Nasdaq Bank Index increasing by over 1%. Despite some debate among experts, the decision was largely welcomed by industry executives. For further details on how this development might impact net interest income and bank deposits, refer to the insights shared by industry professionals. #bankingindustry

Now to the monetary economists, increase in MPR is a contractionary monetary policy measure to reduce excess liquidity. Isn’t it? If this is the case, how does the CBN, being the masterpiece of monetary policy, achieve this goal in the midst of huge deficit financing coming from its fiscal counterpart? In this case, a risk-averse economic agent would sure resort to more liquidity preference in order to meet their precautionary and transanctionary needs, which may lead to further increases in MPR in the future. Perhaps the reason for its incessant increase over the years. My understanding of the workings of an economy is that, both fiscal and monetary policies should be harmonized to achieve optimal economic performance especially at a time when an economy is faced with intermittent imbalances in its critical institutions.

🔥 🔥 🔥 Hot from the press, the BCBS publishes its re-calibration of IRRBB interest rate shocks today. After a long period of market perception, that the shocks were too high in a persistently low interest rate scenario before 2022, it feels now overdue in July 2024, that the shocks needed to be adjusted upwards. The committee increases shocks for AUD, EUR, GBP, SGD, SEK and SAR. Furthermore, the BCBS is reducing the rounding of interest rate shocks from a multiple of 50bps to 25bps. If you would like to discuss the impact on your institution, please reach out via a dm or email: bsm@fisglobal.com Felix Raedel, Alvaro Cabrera, Omar T., David Hough, Juergen Ferber #IRRBB #CSRBB https://lnkd.in/eiNZ-TPR

🚨Monday Morning Market Metrics🚨 ·        LendingOne DSCR Rates moved +0.04% last week ·        Best Rate 80% LTV Single Family Purchase 6.82% ·        Current Promotions: o  Floating Rate Lock – if the rate drops 0.20% you can relock into the new rate for $750 at closing. ·        Book Recommendation: Shantaram #dscr #mortgagerates #sfr #realestateinvesting

🚨Monday Morning Market Metrics🚨 ·        LendingOne DSCR Rates moved higher 0.17% last week ·        Best Rate 80% LTV Single Family Purchase 6.63% ·        Current Promotions: o  Floating Rate Lock – if the rate drops 0.20% you can relock into the new rate for $750 at closing. ·        Book Recommendation: Remarkably Bright Creatures #dscr #fixandflip #newconstruction #sfr #realestateinvesting

The Monetary Policy Committee (MPC) voted unanimously to raise the Monetary Policy Rate (MPR) by 25 basis points from 27.25% to 27.50%; retain the Cash Reserve Ratio (CRR) at 50% for Deposit Money Banks and 16% for Merchant Banks. The Committee retains the Liquidity Ratio (LR) at 30% and the Asymmetric Corridor at +500/-100 basis points around the MPR. #PressBriefing #MPC

Nigeria's Monetary Policy Rate (MPR) is now 27.50%.