Operating framework
Indonesian banks will switch to reserves averaging in July
Latest move in Bank Indonesia’s major overhaul of monetary policy transmission and efforts to deepen financial markets
Chicago Fed’s Evans: central bankers may be biased against inflation
Chicago Fed president thinks current policymakers may have overcompensated for inflationary bias of the past
Yellen willing to reassess 2% target
Fed chair says question of the right target level is one of the most important facing central banks today; wind-down of QE likely to be dull, she adds
Yellen told inflation target needs revising
Economists say current economic conditions call for a revision in the inflation target; Federal Reserve should appoint commission to advise on “path forward”
Chinese monetary policy now more in line with G3 central banks – BIS paper
“Liberalisation and transformation” of the Chinese economy has led to changes in the PBoC’s monetary policy rule, and an improvement in inflation performance, authors say
Inflation targeting three decades on
Former RBNZ governor Don Brash reflects on whether New Zealand’s experiment with inflation targeting has worked
Inflation is preventing interest rates from rising faster, says Powell
Labour market progress points towards a faster pace of normalisation for the Fed, but below-target inflation is preventing rates from rising above the current “gradual pace”
Policy rate forecasts influence expectations – Riksbank paper
New data allows researcher to assess the “potency” of rate forecasts, which do appear to influence expectations
Flexible exchange rate aids those hit by commodity shock, IMF report says
“Sacrifice ratio” is lower for those that allow local currency to depreciate; fixed exchange rates are becoming more expensive, IMF says
Riksbank proposes changes to inflation target
Central bank plans to use a variable that avoids short-term distortions, and to reinstate a band around the target
The BoJ’s risky yield curve control experiment
The Bank of Japan’s experiment with yield curve control could work if appropriate targets and communication strategies were applied. But its current policy objectives are muddled
John Williams backs move to price-level targeting
San Francisco Fed chief says inflation targeting is losing its effectiveness in the face of a very low natural rate
BoJ should provide ‘more realistic’ projections – former policy board member
Claims constant overestimation of inflation expectations undermines credibility
Should more attention be paid to house prices?
The Czech National Bank’s experiences offer insights into using a broader inflation measure with a greater weight on housing to address both monetary and macro-prudential policy requirements
Bank of Jamaica outlines plans to become ‘modern’ central bank
Initiatives to implement inflation-targeting framework and liberalise forex rate already under way; IMF says strengthening autonomy will help
Monetary policy has inevitable fiscal effects – Willem Buiter
Former Bank of England official rails against fiscal theory of the price level in speech to RBI, but says monetary policy still cannot escape its fiscal dimension
RBI makes fresh amendments to liquidity framework
Central bank continues reforms begun under Raghuram Rajan and asks government for new tools; markets still face “liquidity overhang” from demonetisation
BIS report: build liquidity co‑operation early to prepare for crisis
CGFS report urges central banks to build networks domestically and across borders to have liquidity ready for the next crisis
Icelandic leaders clash on possible peg
Prime minister challenges finance minister’s assertion that the krona needs to be pegged; government launches review of exchange rate policy
Daily open market operations paying off – National Bank of Denmark
Introduction of daily open market operations has smoothed liquidity management, stabilising the money market reference rate
Tanzanian central bank slashes discount rate
Central bank cuts discount rate for the first time since 2013, from 16% to 12%; increase in NPLs has discouraged commercial banks from lending
Ending speculation on the Czech forex cap: quo vadis, CNB?
David Vavra suggests a method the Czech National Bank could use to free itself from the mounting pressure on its exchange rate peg, avoiding a “Swiss-style” exit
Iran needs to overhaul monetary operating framework – IMF
Absence of policy rate and emergency lending facilities is creating instability, fund warns; central bank council “dominated” by representatives from other government agencies
Kazakhstan’s long path to inflation targeting
After a slow start, the National Bank of Kazakhstan’s implementation of inflation forecast targeting is beginning to mature. By Warren Coats