Monetary Policy
Yellen calls for “sustainable” fiscal policy
Bank lending has grown since passage of Dodd-Frank Act, Fed chair tells Congress
Riksbank sees need for expansionary policy, despite rising inflation
Inflation in Sweden is now close to target, and expected to overshoot, but the central bank is holding policy steady with an eye on political uncertainty
Transparency: Bank of Canada
Communications embedded in the policy process, fresh thinking on shared content and an expanded senior team show the central bank’s commitment to staying at the leading edge of transparency
Market ‘tightness’ affects QE success – Riksbank paper
Model accounting for the demand and supply of bonds allows authors to reveal new insights into the price and liquidity impact of asset purchases
Nigeria’s central bank is in the eye of the storm
The Central Bank of Nigeria’s flawed foreign exchange policies worsened a recession in 2016. It now needs to rebuild its credibility, argues former CBN deputy governor Kingsley Moghalu
Canada’s Schembri highlights new inflation communication method
Bank of Canada has adopted three-pronged core inflation approach but now only publishes forecasts of headline inflation in its reports
US uncertainty puts Bank of Mexico on edge
Central bank hikes rate by 50bp as uncertainty from the US threatens inflation; international fuel prices are also a concern
BoJ’s Nakaso: inflation on upward path this year
Pressure on wages, rising commodity prices and a turnaround in expectations will drive up prices, deputy says; rejects calls for rate hike
Fed officials emphasise risks despite improving outlook
“Risk management” approach to policy needed despite improving outlook, say Evans and Kashkari; Bullard notes balance sheet adjustment also an option for tightening
IMF gives thumbs up to Indonesia’s new monetary operating framework
Interest rate corridor and switch to new policy rate has improved monetary policy transmission, early data shows, but further reforms could strengthen framework further
RBI highlights bad debts as it holds rates
Surprise hold as committee sees “very sticky” core prices and global effects; central bank may create a ‘bad bank’ to tackle NPA problem
BIS paper tracks US and eurozone QE spillovers
Shadow rates approach helps authors show US QE spilled across borders more strongly, though impact differed between countries
Angola disregards IMF advice on exchange rate overhaul
Angolan authorities disagree with IMF over suggested exchange rate framework changes but agree to a banking sector clean-up
Kazakhstan’s Akishev sets sights on lower inflation
Governor hails success with inflation targeting and says central bank now plans to push inflation even lower; NBK also working on new banking supervision framework
BoJ acts to thwart pressure on yields
Central bank commitment to yield curve control faces first serious test; BoJ launches unlimited purchases to hold yield down
Kenya’s monetary policy framework under threat – IMF
New interest rate caps are “constraining” the central bank’s ability to conduct monetary policy while negatively affecting banks’ profitability, but action plan could see them eliminated
Norges Bank defends policy framework amid government review
The government is assessing the central bank’s governance and monetary policy; Norges Bank says it needs a “long and flexible horizon” to be able to properly conduct its policy framework
BoE signals extra slack as it revises growth outlook upwards
Mark Carney indicates the MPC is willing to keep rates on hold, although risks may emerge as details become clear about the UK’s EU departure; UK government publishes a white paper on Brexit
Only ‘gradual’ increases in interest rates on the cards at the Fed
FOMC members think only “gradual” adjustments to monetary policy are warranted; current pace will strengthen the labour market and see inflation rise
Unconventional policy has improved ‘pass-through’, says ECB
“Simple pass-through models” are ill-equipped for analysis, paper argues
BoJ ups growth forecast after Trump shock
Improvements in overseas economies and yen weakness prompt central bank to revise up its growth forecast, though inflation is largely unchanged; policy remains on hold
Central Bank of Kenya halts reference rate calculation
Rate made redundant by interest cap, Njoroge explains, as banks prepare for the new arrangement; central bank maintains interest rates at 10%
Ukraine governor says bank has met first inflation target
Gontareva says Ukraine should hit tighter target for 2017
Regulations and QE impacting repo market – ECB’s Mersch
Executive board member says “confluence of factors” has boosted demand for collateral and impaired its supply, but the situation may improve