The central bank has slashed its forecast for economic growth this year from 4.1% to 2.6%.
Inflation is pushing right up against the Central Bank's ceiling of 6.5% per year.
The central bank's monetary policy committee, known as Copom, meets eight times a year.
Suppose for some perverse reason the central bank wanted to keep interest rates zero forever.
He says that the central bank must retain independence and not accept orders from lawmakers.
"There is some semblance of calm returning, " says Duvvuri Subbarao, governor of the central bank.
Karzai summoned Abdul Qadir Fitrat, the governor of the Central Bank, to the palace.
However well he fills the new job, the central bank alone cannot change things much.
The economy may stay in a slump, but the central bank will be fine.
All the central bank had to do was to employ these resources to buy up reals.
All along, this market has been positioning itself for bold moves by the central bank.
That will force the Central Bank to raise interest rates, and will effect equity investors.
The central bank typically pays little or, in America, no interest on these reserves.
However, he does hold the advantage of running the central bank of Germany, Europe's strongest economy.
The proceeds would boost the central bank's reserves and allow interest rates to fall.
The central bank may have to raise interest rates to defend the weak rupiah.
In practice, the central bank is free to pursue an inflation-rate goal set by the government.
The central bank has already cut interest rates several times in the past few months.
The new head of the central bank has also been calling in overdue loans.
"It is important to increase transparency and brighten the mood inside the central bank, " he says.
Few expect the central bank to start raising short-term rates before late 2015 or early 2016.
The Bank of Korea, the central bank, is lowering forecasts for both this year and last.
Mr Fazio countered that the central bank is not responsible for how companies report their finances.
The Central Bank of Europe is expected to raise rates Thursday to 1.25%.
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On the face of it, the central bank's latest policy change should improve this bleak picture.
So the expectation is that the central bank will buy government bonds of Spain and Italy.
But surely, you may say, the eurozone has a central bank: the European Central Bank.
Thursday was the third time during the strike that the Central Bank has suspended dollar auctions.
Like Sir Mervyn, he thinks it's not flexible enough and risks tying the central bank's hands.
The central bank cut interest rates twice in 2013 to help boost economic expansion.
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