Monetary Policy
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
Weidmann says latest ECB package went ‘too far’
Bundesbank president says the council was agreed on the need to act in the wake of weaker economic projections, but the eventual measures, including an expansion of QE, were too much
Monetary policy takes time to influence inflation, Tombini tells senate
Brazil governor says central bank will not “shy away” from acting to lower inflation; target of 4.5% to be reached by the end of 2017
Four largest eurozone economies show different reactions to monetary policy, paper finds
The economies of Germany, France, Italy and Spain show marked differences in responding to policy rate rises, researchers argue
Sweden’s Riksbank has mixed forecasting performance, report finds
Riksbank “relatively good” at projecting growth and unemployment, but less so when it comes to the policy rate; this is “notable” and not “particularly satisfactory”, report notes
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