FACTBOX - Which central banks will raise rates next?

Norway's central bank is expected to raise interest rates
next week from record lows, following hot on the heels of the
Australian central bank, which become the first in the G20 to
tighten policy as the global financial crisis eases.

The world's top central banks show no inclination to raise
rates any time soon. The following highlights the major central
banks closest to reversing the unprecedented wave of rate cuts
put in place to combat the downturn.
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NORWAY

-- Policy rate: record low of 1.25 percent [NOINTR=ECI]

-- Next Norges Bank meeting: Oct 28 ECONNO

-- Reuters consensus forecast: +25 bps Oct 28
[ID:nLK376134]

-- Economic growth has been stronger than expected,
unemployment is low and house prices are swinging higher. The
government also has a slightly expansionary budget.

-- The central bank has flagged a need to raise rates by
saying current levels are extraordinarily low.

-- Three-month forward rate agreement NOKFRA rates are
trading at 2.30 percent for transactions starting in a month,
while the same three-month FRAs starting in three months are at
3.07 percent and those starting in half a year at 4.01 percent,
well above the central bank's policy rate.
LINKS:
> Norway crown hits 1-yr high on oil spending
[ID:nLF501011]
> Norway CPI spurs Oct rate rise expectations
[ID:nL9575673]
> Norway c.bank says rates to rise, crown jumps
[ID:nLU142820]
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AUSTRALIA

-- Policy rate: Cash rate is 3.25 percent [AUCBIR=ECI]

-- Next Reserve Bank of Australia meeting: Nov 3 ECONAU

-- Reuters consensus forecast: +25 bps on Nov 3

-- The Reserve Bank of Australia raised its cash rate to
3.25 percent from 3.00 percent on Oct. 6 to become first G20
central bank to raise rates since the global financial crisis
eased.

-- A surge in employment in September, rising consumer
confidence and a robust housing market have prompted markets to
price in further rate rises.

-- A Credit Suisse indicator CSRBA=CSAU suggests markets
have fully priced in a 25 bps point rise in the cash rate on
Nov. 3 and a one-third chance of a 50 bps increase.
LINKS
> Central bank makes inflation policy priority
[ID:nSYD435378]
> Australia c.bank says rates to move to normal
[ID:nSYD397384]
> Central bank raises rates, first in G20
[ID:nSP499690]
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INDIA

-- Policy rate: repo rate 4.75 percent [INREPO=ECI],
reverse repo rate 3.25 percent [INRREPO=ECI].

-- Next Reserve Bank of India meeting: Oct 27 ECONIN

-- Reuters consensus forecast (Oct 16): +25 bps Jan-April
2010. [ID:nBOM432800]

-- Rate rise expectations have been fanned in recent weeks,
as the economy shows signs of a pick up and inflation is
revived after a period of deflation. The central bank governor
has said India may need to tighten policy sooner than developed
nations, although he said the timing was uncertain.

-- No rate rise expected on Oct. 27, but Reuters poll
points to outside chance bank reserve requirements could be
increased.

-- Three-month overnight interest rate swaps INROIS have
risen to 3.60 percent from 3.24 percent in June, suggesting
they are pricing in a quarter point rise by the end of this
year.
LINKS
> India inflation up, no hike seen Oct. 27
[ID:nDEL527191]
> Is India ready to raise interest rates?
[ID:nHKG445848]
> India may exit policy before advanced nations
[ID:nBOM474507]
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BRAZIL

-- Policy rate: 8.75 percent [BRCBMP=ECI]

-- Next Monetary Policy Committee meeting: Dec 8-9 ECONBR

-- Reuters consensus forecast: First rate rise most likely
in H1 2010. Some see no change until H2 2010.

-- Analysts have revised up 2009 growth expectations and
the central bank has raised its inflation forecasts for 2009
and 2010 while urging policy makers to remain vigilant. The
combination of growth and inflation expectations has pushed
interest rate futures higher in recent weeks.

-- Brazil's yield curve is pricing in a slight chance of a
rate hike in December.
LINKS
> Brazil holds interest rates again
[ID:nN21455080]
> Brazil rates seen on hold for rest of 2009
[ID:nSAQ002360]
> C.bank may hike rates before year end-report
[ID:nN01258479]
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SOUTH KOREA

-- Policy rate: 7-day repo rate record low 2 pct
[KROCRT=ECI]

-- Next Bank of Korea meeting: Nov 12 ECONKR

-- Reuters consensus forecast (Oct 9): +25 bps in Q1 2010
[ID:nSEO136917]

-- Bank of Korea dampened expectations for a rate rise as
early as November by toning down its concerns about a sharp
rise in property prices and mortgage lending. That left
analysts to shift their expectations for a rate rise out to Q1
2010.

-- Still markets are pricing in risk of a rate rise this
year. Three-month certificates of deposits KRCD=KQ are around
2.79 percent, which dealers say fully prices in at least a 25
basis point rise in the policy rate during that period.
LINKS
> Bank of Korea softens tone, dampens rate bets
[ID:nSEO80574]
> Australia rate rise eases pressure on Korea
[ID:nSEO189878]
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- MEXICO

-- Policy rate: 4.50 percent [MXCBIR=ECI]

-- Next central bank meeting: Nov 27 ECONMX

-- Banamex consensus forecast: +25 bps in April.

-- The central bank left rates steady on Oct. 16 but warned
that new taxes proposed by the president and a sharp economic
recovery could fan inflation.

-- Interest rate futures <0#TII:> suggest investors are
betting on a 25 basis point rate hike as soon as November.
LINKS
> Mexico cbank holds rates, sees inflation risk
[ID:nN16241597]
> Mexico inflation slows early Oct; rates eyed
[ID:nN22536383]
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MAJOR CENTRAL BANKS

-- FEDERAL RESERVE: Fed funds rate has been at 0.00 percent
to 0.25 percent since December 2008. Officials have said
accommodative policies are warranted for an extended period but
policy would have to be tightened eventually. -- EUROPEAN
CENTRAL BANK: Refinancing rate has been at record low 1.O
percent since May. The ECB has cautioned against hopes of a
speedy recovery. Analysts see rates on hold till Q3 2010.

-- BANK OF JAPAN: Overnight call loan rate has been at 0.10
percent since December 2008. A big output gap, falling capital
spending plans and prospects of prolonged deflation will keep
the policy rate at ultra-low levels for several years, analysts
say.

-- BANK OF ENGLAND: Bank rate has been at record low of 0.5
percent since March. Analysts see policy remaining ultra-loose
for months. Indeed, sizeable minority forecasts expansion of
BOE's quantitive easing programme, currently 175 billion
pounds.
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Compiled by Reuters bureaus

Neil Fullick, Asia Treasury, +65 6870 3818
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