World Currencies
Various world currencies including Chinese Yuan, Japanese Yen, US Dollar, Euro, British Pound, Swiss Franc are pictured in Warsaw in this file photo. REUTERS

What the Fed's Janet Yellen and the ECB's Mario Draghi said at Jackson Hole may be debated by the markets next week, but the world's major central banks are not scheduled to provide any key information in the last week of August.

That said, monetary policy decisions in a few emerging market economies are likely to impact the related markets.

Yellen repeated her stand "we are not there yet" with regard to the job market recovery in the US while Draghi focused on the need for structural changes in the sector, especially in a multi-country monetary union like the eurozone.

How the markets have digested the remarks will be seen only on Monday. The dollar index, the gauge that measures the greenback's strength versus a basket of countries on a trade-weighted basis, is now trading at an eleven-month high.

The USD index has rallied 2.08% in July and more than 1.2% so far in August, indicating the extent of hawkishness the market is pricing in with regard to the US economy.

Interest rate decisions by Hungary, Turkey, Israel, Egypt and Albania are the most important central bank events in the calendar for the week to 29 August. Most of them are in easing cycles, but the Egyptian central bank raised its main rate at its last meeting.


The Magyar Nemzti Bank (MNB), the central bank of Hungary, is scheduled to set the rate on 26 August. It has been on a cutting cycle since July 2012 and the main interest rate, the rate of one-year central bank refinancing for financial institutions, is down to 2.1% from 7%. On 22 July the bank effected a 20 basis points cut from 2.3%.

Hungarian inflation and GDP numbers that came this month showed positive signals with the year-on-year inflation rate increasing to 0.1% from -0.3% in July and the economy expanding 3.9% in the second quarter, up from 3.5% in Q1.


The Turkish central bank lowered the benchmark one-week repo rate 50 basis points to 8.25% on 17 July citing easing inflationary pressures. The market will be keen to see the decision and the statement on 27 August as recent data were largely hawkish.

Turkey's inflation rate has increased to 9.32% from a year earlier in July from 9.16% in June and the unemployment rate has fallen to 8.8% in May from 9.0% in the previous month. June retail sales data also showed sales growth rising to 5.2% from 4.1%.


Israel had unexpectedly lowered its "headline rate", the main policy rate of the central bank, 25 basis points to 0.5% on 28 July, and so the 25 August decision will be keenly watched.

Israel's data in August were largely negative surprises, and the big fall in GDP growth to 1.7% in Q2 from 2.8% in the previous quarter, as per the 17 August data, had pushed the Israeli shekel sharply lower against the dollar. The shekel is now holding near a six-month low.


Egypt, at its 17 July meeting, raised the overnight deposit rate, the main policy rate of the central bank, by 100 basis points to 9.25%, citing the surge in inflationary pressures after the government's decision to cut subsidies.

On 27 August, the Egyptian central bank is likely to highlight the 11 August data, which showed the inflation rate in the country increasing sharply to 10.6% in July from 8.2% in June.


Albania last cut its one-week repo rate, the benchmark interest rate, by 25 basis points to 2.5% in May. The rate was at 3% in January.

The Bank of Albania will announce its monetary policy on 27 August and the only data point to consider after the last decision is the 8 August inflation data that showed the prices growth accelerating to 1.8% in July from 1.5% in the previous month.