Monetary Policy
Reserve Bank of India modifies liquidity framework
Rajan spells out plans to “progressively lower” the liquidity deficit in the banking system as part of a broader shift in focus; RBI cuts policy rate by 25bp with inflation on track
Bank of Thailand frets over zero lower bound
Minutes show latest policy decision influenced by worries over financial imbalances and perceived need to maintain “policy space” in event of economic hit
West African union must improve monetary transmission, IMF staff say
The West African Economic and Monetary Union must increase the effectiveness of monetary policy, IMF staff say; reforms should target bank refinancing and government securities markets
ECB had to act to forestall fall in inflation expectations, Praet says
The ECB had to expand its unconventional monetary policy to prevent a downward shift in long-term eurozone inflation expectations, Peter Praet says; inaction of others “no excuse”
Chicago and Cleveland Fed presidents back gradual path for rate increases
Charles Evans is “comfortable” with tightening implied by latest round of dot plots; he and Loretta Mester spell out outlooks for growth and inflation and risks surrounding them
Dudley hits back at plans to curb Fed discretion
New York Fed chief says plans to force Fed to follow a monetary policy rule would lead to “significant policy errors”; supports transparency, but within bounds
Latin American countries may be especially exposed to US monetary policy, paper finds
These economies may be more vulnerable than most emerging markets to the normalisation of US monetary policy, claims a Bank of Spain paper
BoJ’s Funo calls for efforts to revive potential growth
Board member uses first speech to back continued expansionary policy, highlighting steps that could help raise Japan’s potential growth from current depressed levels
Angolan central bank hikes again amid soaring inflation
Inflation breaches 20% in February prompting central bank to raise interest rates to 14%; new governor continues tightening cycle in attempt to curb prices
Yellen: volatile global outlook calls for gradual hikes
Fed chair soothes market concerns over pace of rate rises, highlighting importance of low rates in offsetting troubles abroad and saying rates will rise more slowly than previously indicated
Eurozone monetary policies ‘virtually exhausted’, Dutch central bank head says
Eurozone monetary policy is “virtually exhausted”, Dutch central bank head warns; structural reforms are needed to restore growth rates
Rajan and Mishra lay down rules of the monetary game
Authors warn current models may display the policy biases of those who built them, calling for better dialogue and analysis of monetary policy spillovers
Central banks struggle to manage price expectations
Large central banks have responded aggressively to falling levels of inflation and inflation expectations, but with divided and limited success. What can policy-makers do to restore confidence?
Turkish central bank narrows rate corridor with cut
Central bank begins process of narrowing rate corridor in last meeting of Erdem Başçı’s term, though it keeps the policy rate on hold