Monetary Policy
Argentine central bank holds rate on its bonds with eye on inflation
Reference rate held at 30.25% ahead of second inflation figure release; second monthly statistic from Indec due today, no official annual figure yet
A year of progress for Chinese reforms, but there is much still to do
Pan Gongsheng, deputy governor of the People’s Bank of China, writes about China’s growth prospects, RMB exchange rate reform and the past years’ stock market fluctuations
RBNZ bulletin shines light on policy-making process
Article reveals details of how central bank reaches monetary policy decisions over a nine-day period, from information-gathering and modelling to deliberation and communication
Mexican deputy calls for reinforced ‘global financial safety net’
Javier Guzmán Calafell sees IMF as key player in maintaining global financial stability, but says it needs more resources, tools and legitimacy
Orphanides: governments should rein in ‘immense power’ of central banks
Central bank balance sheets give them power to dramatically affect the distribution of wealth, undermining democracy, former Central Bank of Cyprus governor argues
IMF staff suggest using tiers if CNB cuts rates below zero
Fund encourages Czech National Bank to prepare for ‘eventual exit’ from exchange rate commitment; suggests negative rates are viable tool but could damage bank profitability
Balance sheet policy matters for credibility – Norges Bank paper
Researcher argues a central bank’s financial strength may affect its ability to meet its monetary policy mandate, based on evidence from the UK’s gold standard period
Technical issue affects Fed minutes release
Error in Federal Reserve equipment results in early release in some cases and late in others; minutes show Fed officials grappling with uncertainty amid slowing job growth and UK referendum fallout
Fed’s Tarullo looking for more evidence on inflation
Daniel Tarullo wants to see more convincing evidence that inflation is returning to target before tightening monetary policy; headline and core PCE inflation are still below target
Riksbank tweaks forward guidance, citing Brexit uncertainty
Swedish central bank says it will likely only raise the policy rate from the second half of 2017 onwards; highlights “considerable uncertainty” abroad
QE has mitigated trade shock to eurozone, ECB’s Praet says
ECB's easing has prevented trade shock from reducing eurozone growth rates, Peter Praet argues; "increasing evidence" that negative deposit rates improve QE’s pass-through
Rate delay could deprive Fed of tools in future, warns Mester
Cleveland Fed president says there is a “non-negligible chance” unconventional tools will be deemed as “ultimately ineffective” by the public if the Fed is too slow to normalise policy
Releases of monetary data aid market rate expectations – paper
Working paper published by ECB shows releases of monetary data is helpful to financial markets in forming rate expectations
Mexico hikes rates to stabilise peso depreciation
Bank of Mexico surprises markets with 50bp hike to stem currency depreciation; analysts see global risk factors contributing to exchange rate developments
Bhutan readies to sharpen ‘blunt’ policy instruments
Royal Monetary Authority of Bhutan considering improvements to policy transmission; could involve new lending and deposit windows, departure from current base rate practices
Monetary easing ‘likely’ required over summer, says Carney
Governor expects easing in wake of UK vote to leave the EU; announces additional weekly liquidity operations as part of response, but acknowledges limits to what BoE can achieve
Fed’s Powell sees potential for ‘new headwinds’ in Brexit
Governor says global risks to US outlook have increased in the wake of the UK’s vote to leave the EU
Effective lower bound has ‘tail risk’ influence on monetary policy, ECB paper argues
The ‘tail risk’ induced by the possibility of rates reaching their effective lower bound can cause serious undershooting of inflation targets, an ECB working paper argues
Draghi: Central bankers must align policies
ECB president calls for greater alignment and better communication of economic policy across national borders; calls for globally co-ordinated fiscal expansion on lines of 2008-09
Reserve Bank of Malawi to improve monetary policy architecture
Bank moves towards fully fledged inflation targeting, embracing interest rate-based framework; IMF staff note importance of maintaining tight monetary policy
Rajan has left his mark but risk of fiscal dominance remains
Vishrut Kansal examines the legal framework Raghuram Rajan’s successor will face, arguing much of the outgoing RBI governor’s work will continue but more safeguards are needed
Bank of Israel sees ‘Brexit’ increasing risks to outlook
Monetary committee warns it is too early to tell whether short-term effect on financial markets has run its course; Flug stresses both central bank and finance ministry “keeping close watch”
BoJ paper models impact of guidance on expectations
Announcing forward guidance before reaching the effective lower bound can help to “positively influence” inflation and output growth, the author finds
PBoC governor sets out challenges of pursuing multiple objectives
Zhou Xiaochuan discusses how the People’s Bank of China expresses its multiple objectives as a function that can be optimised, while noting challenges posed to modelling and communications