Monetary Policy
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
Tight policy keeping a lid on inflation – Central Bank of Iceland
“Steep” pay increases and rising house prices keep the central bank on alert; report warns the situation could easily change
China hikes interbank lending rates
PBoC “very worried” by banks’ credit expansion, expert says; raises medium-term lending facility rate by 10 basis points
Turkey keeps policy rate on hold, despite weakening lira
MPC trying to keep a “balance” between government pressure and market demand, analyst says
Cross-border claims shifting in favour of non-banks
BIS international banking statistics show claims on banks fell in third quarter of 2016 but claims on non-banks continued to grow
Protectionist ‘threats’ from US could harm emerging markets – Kganyago
International concerns high on Sarb’s list at latest MPC discussion; uncertainty surrounding US economic policy leads to revision of headline inflation forecast
Book notes: The International Monetary Fund: Distinguishing Reality from Rhetoric, by Graham Bird and Dane Rowlands
The book brings valuable rigour to bear in assessing the work of the IMF, but suffers from a reliance on ageing data in many places, says Jacek Klich
Yellen: Fed asset holdings provide automatic policy tightening
Downward pressure on long-run rates is expected to diminish, making the need to hike short-term rates less pressing, the Fed chair says
Draghi says ‘substantial’ accommodation still necessary for eurozone
ECB sets out new criteria for asset purchases; Draghi says headline inflation rises are driven by energy prices
Bank of Canada re-modelling export links to US – Poloz
Previous approach may have over-estimated importance of US when modelling exports, governor says; uncertainties over US fiscal policy makes forecasting challenging
Yellen: Fed expects rates to hit long-run level by end-2019
Fed chair warns there could be a “nasty surprise” down the road if policymakers wait too long to raise rates
Money targeting key to Egypt reform programme
Central bank to maintain flexible exchange rates and keep a close rein on the money supply as IMF pledges $12 billion support
Davos panellists highlight risks posed by strong dollar
At the World Economic Forum, experts underline the risks of a strengthening dollar on not only US monetary policy, but also on emerging markets’ economies
Central Bank of Brazil discussed smaller hike at December meeting
Copom weighed a 50bps cut, but chose to “frontload” monetary easing, given anchored expectations and promising outlook for inflation
Carney: 250,000 jobs lost by 2018 if BoE had not acted after Brexit vote
BoE governor defends 2016 action by underlining policy trade-off, but warns consumers are "looking through" Brexit-related uncertainties
ECB paper proposes new fiscal-monetary policy mix for eurozone
Researchers suggest non-defaultable Eurobonds issued by new fund
ECB minutes show dissent over asset purchases
Some council members expressed “scepticism” over asset purchases; two programme extension options were discussed