Monetary Policy
PBoC’s hike signals policy management shift
The decision by China’s central bank to raise a suite of interest rates around Chinese New Year marks a shift towards market-based tightening, argues Hui Feng
Plummeting inflation prompts Bank of Zambia action
Central bank cuts policy rate by 150bp, in addition to a cut to the overnight lending rate and reserve ratio; inflation falls from over 18% to 7% in a matter of months
Uncertainty about momentum in the labour market – RBA minutes
“Mixed” picture in Australian labour market shows unemployment increasing alongside full-time employment; spare capacity likely to persist “for some time”
Fed’s Mester says public should not hold policymakers to ‘unrealistic account’
Monetary policy cannot and should not be used to spur productivity growth, says FOMC member; unwinding of Fed’s mortgage portfolio may help guard it against calls to enter the realm of fiscal policy
IMF praises BCEAO’s latest policy actions
Latest round of measures will result in stronger banking sector, mission chief says; rejuvenation of interbank market will help monetary policy effectiveness
Bank of Uganda cuts rate as inflation outlook improves
The near-term inflation outlook worsens, but latest forecasts shows recovery within the target band; the IMF’s Lagarde praises the central bank for its “prudent” approach
Rosengren warns Fed may have to increase pace of tightening
Data suggests that the US labour market is tightening, Eric Rosengren argues
Website of the year: Central Bank of Kenya
The East African central bank has embraced responsive design to cater for an increasingly mobile audience, eclipsing the websites of many peers
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