Monetary Policy
RBNZ investigating possible leak
Central bank launches external investigation, after former RBNZ economist was told there would be an unexpected rate cut before the decision was made public
Capital flow measures needed before offshore krona auction, says Guðmundsson
If the currency auction goes to plan, inward flows could strengthen and the Central Bank of Iceland needs the tools to resist them, its governor says
IMF staff praise Colombian policy mix as central bank hikes by another 25bp
Co-ordinated policy action is supporting “orderly adjustment” in Colombia’s economy, IMF staff say, including good pass-through of rate hikes; central bank continues to tighten
IMF paper explores spillovers from conventional and Islamic finance
Research considers how monetary policy should adapt to the different stages of development of Islamic finance, and its interactions with conventional finance
Inflation expectations well-anchored, Richmond Fed president says
Lacker tells audience at Banque de France he believes expectations are anchored, despite drop in inflation compensation; Villeroy de Galhau notes drop in market-based measures in eurozone
Eurozone not at zero lower bound, Praet says
ECB chief economist Peter Praet has said the eurozone is not at its zero lower bound; remarks may not contradict earlier guidance by ECB president Draghi
Fed QE drives portfolio rebalancing towards foreign assets, Brazil paper finds
Research analyses ‘comprehensive’ dataset for Brazilian capital flows and a smaller one for other EM economies
Currency networks shape global spillovers, BIS authors find
Authors make use of recently enhanced BIS data sets to map currency networks, studying how these affected the risk-taking channel of monetary policy during the ‘taper tantrum’
Deputy governor warns of perils in changing Sweden’s inflation target
Sweden would only be able to raise its inflation rate successfully if other major economies around the world did also, deputy governor Ohlsson says – competiveness would disappear
Sarb hikes rate despite split decision on MPC
Monetary policy committee decides to raise key rate by 25bp after an initial 3:3 split; concerns over inflation remain for some members
BoE alert to second-round effects from low inflation, minutes show
BoE enters eighth year with rate at 0.5%; committee will continue to watch for second-round effects of inflation on wages
Norges Bank willing to consider move into negative territory
Central bank cuts rates to 0.5% and signals further action likely to follow; executive board concerned by side-effects of negative rates, but willing to use them if necessary
Fed officials lower expectations of rate increases
Fed officials forecast rate increase of 50bp this year, compared with 100bp in December; Yellen “wary” of recent increase in headline inflation
Bank capital matters for risk-taking channel of monetary policy, Norges Bank paper finds
Less capitalised Norwegian banks are more likely to extend credit to risky firms in response to a cut in the policy rate, author finds