Monetary Policy
Swedish GDP growth beats forecast, adding to bank’s concerns
Inflation remains below the 2% target, despite lower unemployment, leaving the Riksbank reluctant to change course and raise rates before the summer of 2018
Central banks must exit asset purchase programmes with care, paper finds
Bundesbank paper uses model of eurozone to judge effects of asset purchases
Kganyago: monetary policy can't solve South Africa’s structural issues
Governor defends mandate, saying Sarb is focusing on what it “can do”, not “what it would like to do”; no “narrow focus”
Fed to begin shrinking balance sheet ‘relatively soon’
Rates remain on hold as the FOMC eyes below-target inflation, while the wording change implies that action on the balance sheet could begin sooner than previously expected
Favourable inflation prompts 100bp cut in Brazilian interest rate
Central bank continues easing cycle as political uncertainty not feeding through to inflation; analysts expect another large cut this year
Evolution of monetary policy in advanced economies spells trouble for emerging markets – paper
Research explores the impact future monetary policy will have on emerging markets, concluding many will be forced to implement defensive measures
Neutral rate down to around 3.5% in New Zealand – RBNZ deputy
Rate is challenging to estimate but central bank’s models and surveys suggest it has fallen in recent years to around 3.5%
Fintech not an ‘immediate threat’ to monetary policy – paper
Research from the Bank of Canada explores the impact fintech could have on central banks’ responsibilities, deeming it “too early to judge” the effect on mandates
Uzbekistan to press ahead with forex reforms
Authorities plan to “frontload” efforts to unite black market and official exchange rates, allowing the central bank to focus on stabilising prices
Inflation expectations down in ECB forecaster survey
Forecasters see inflation falling slightly, despite rising employment and GDP growth
Mozambique central bank praised for monetary framework overhaul
IMF staff approve of changes made towards interest rate corridor, but say the central bank should remain vigilant with regard to prudential regulation
ECB will look afresh at policy this autumn – Draghi
Draghi says recovery is continuing, but strikes a cautious note on inflationary pressures
Sarb takes action amid ‘extremely weak’ demand
Central bank revises down its forecasts as economic situation deteriorates; governor warns of possible cliff effect if there are further rating downgrades
Bank of Japan cuts inflation forecast as policy remains on hold
The BoJ cuts its forecast for prices as it struggles to hit its inflation target; keeps policy steady
Verbs matter in forward guidance – Italian paper
Researchers look at verbs used in ECB statements from 2002 to 2015
IMF praises Madagascar’s approach to monetary framework change
Madagascan central bank to introduce overnight deposit facility to form basis of an interest rate corridor; fund notes effects of vanilla bean shock still being felt by banks
The BoJ’s exit policy and balance sheet risks
The Bank of Japan will need to follow a meticulous sequencing of events as its ‘normalises’ monetary policy, making current concerns about negative equity appear premature