Opinion/Monetary Policy
Iraq's central bank builds credibility
The strength of their currency is one solid economic achievement the Iraqis have to hold on to, according to this article. It attributes this remarkable level of stability to sound government policies - specifically the transformation of the Central Bank…
Key steps to African economic union
In this article South African Reserve Bank governor Tito Mboweni says the challenge is to ensure that SADC countries are ready and committed to implement the macroeconomic convergence programme while they develop the specialised skills and capacity to…
Has Greenspan changed views on bubble management?
This article asks whether Fed chief Alan Greenspan has changed his view that bubble management is strictly an ex-post job for a central banker? With cumulating signs of a bubble in the housing market, the Fed is dipping into its tool chest for some moral…
EU's referendum failure leaves ECB as scapegoat
EU politicians in need of a scapegoat after the rejection of the proposed constitution may be tempted to cast the European Central Bank in that role, says this article. And recent comments from ECB policymakers suggest its defences may be about to crack,…
Making the single currency a scapegoat
This article published on Sunday 5 June by Hamish McRae looks at the recent criticism of the single currency, and asks if the euro was a terrible mistake? The author says that while the eurozone is not going to collapse in the near future, 'it will…
Putting pressure on China's peg
A clamor of complaints from America's industrial heartland is galvanizing Washington into action, according to this article. But the big question is whether a stronger yuan will make much difference to the US economy, it says.
Is the IMF an endangered species in Asia?
This article says last week's meeting of the Asian Development Bank marked the resurrection of the idea of an "Asian Monetary Fund". This step, along with the Asian Bond Fund, will not only move Asia further down the path of integration, but also reduce…
Central bankers have to practise silence
This article published on Wednesday 11 May says central bankers have an obligation to speak out when politicians' actions threaten price stability, but on matters of tax and expenditure policy, central bankers, including Alan Greenspan, should tread…
RBA's fragile independence
This article published on Thursday 5 May says that although discussion is an integral tool in setting monetary policy, the jawboning should be the domain of the governor of the Reserve Bank of Australia. Unfortunately, over the past six months, the…
Fed's blunder should make Asia green with envy
This article published on Thursday 5 May says no policy maker in Asia can claim to match the Fed's mastery over "open mouth operations". Where many of the Asian central banks go wrong is in thinking they'll get more respect from the market by being…
Greenspan misses the point about yuan
This article looks at Alan Greenspan's recent comment on China that "They're going to have to, for stability's purposes, move their currency." In theory, Greenspan is right about the central bank "finding some difficulty" in selling debt. However, the…
CBN on learning curve
In almost one year of Charles Soludo's appointment as governor of the Central Bank of Nigeria his tenure the CBN is in a learning curve, this article says. This has manifested in three major policies, among them the restructuring of the CBN and the…
When will China loosen its peg?
This article says that China was likely to have been conspicuous by its absence at the G7 gathering in Washington on the weekend of 16-17 April. Beijing is moving at its own pace on currency reform, it says, and it would seem just a matter of time before…
Philippines makes Greenspan's job look easy
This article published on Monday 11 April looks at the changeover taking place in July when deputy governor Amando Tetangco replaces Rafael Buenaventura as governor at the Philippine central bank. Tetangco sees his tenure as being about "fusing…
Can Bank of England's Mervyn King take on Blair?
With a general election set for 5 May in the UK, this article asks whether the Bank of England will take on Tony Blair and raise rates on Thursday risking a political backlash from the party that looks set to win the election. Or keep them on hold, and…
The Bank should act soon
The Bank of England should act soon to raise interest rates, according to this article published on Friday 4 March by the Financial Times. With a general election expected in May, the Bank risks being accused of political motivations if it doesn't hike…
A slow boat to yuan devaluation
This article says China is probably a decade away from a free floating yuan and full-blown capital liberalization. A more realistic option, it says, would be a two-stage program that involves a widening of the yuan trading band and the adoption of a…
Minneapolis Fed: Avoiding monetary policy mistakes
The Federal Reserve Bank of Minneapolis Quarterly Review December 2004 article 'Avoiding significant monetary policy mistakes' by Gary Stern and Preston Miller deduces properties of optimal monetary policies based on modern theory and standard empirical…
Fed officials don't see China dropping peg soon
According to this article published Friday 11 February, Federal Reserve officials aren't optimistic that China will drop its currency peg against the dollar anytime soon with the decision in the hands of the State Council.
Fed's increase is case of perfect transparency
The FOMC's recent action to raise interest rates had been fully anticipated with not a single point move on the yield curve, from two years to 10 years. This article describes the move as a case of perfect transparency.
Does Europe need stability or flexibility?
After long fighting a weakening of the stability and growth pact, it now appears as if Brussels is willing to play along. This article looks at the expected revamp of the pact and asks whether it will hurt or help Europe's economy.
When monetary tools start to lose their edge
This article asks what central bankers do when their monetary tools begin to lose their edge. This may be a question that the Federal Reserve is having to address at the moment, it says. The Federal Reserve's challenge seems to be that the linkage…
Deficit triggers rumbling at Fed
George Bush's longtime honeymoon with the Federal Reserve may be ending, this article suggests. The new element is a rising concern at the Fed about the US budget deficit, which hit $413 billion in 2004; a low and declining national savings rate and…
PBOC, modelled on Fed, bows to politics
When China's top policy makers set out to streamline the country's 57-year-old central bank system six years ago, they chose the U.S. Federal Reserve as a model, this article says. But while the People's Bank may be gaining clout as China's economy grows…