Monetary Policy
RBNZ cuts number of interest rate decisions
Starting next July the Reserve Bank of New Zealand will take three-month summer break from monetary policy announcements; ‘clear rule' to replace ‘long-running pattern' for release dates
National Bank of Denmark calls end to crisis measures
Central bank has moved from buying to selling foreign exchange in recent months, opening up room to return deposit limits to more normal levels and re-start government bond issuance
Eurozone QE has ‘significantly increased inequality’, Bundesbank paper argues
Asset price changes following the introduction of eurozone quantitative easing have largely benefited the wealthiest households, a Bundesbank working paper says
Turkish central bank eyes return to normality
Central bank plans to return to a simpler, more conventional monetary policy framework, but politics may yet get in the way
Canadian deputy says LTV and DTI limits ‘most effective’ macro-pru tools
Lawrence Schembri examines demand and supply factors underpinning rise in house prices; evaluates macro-prudential tools used in Canada and elsewhere
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
Inflation targeting should be improved, not replaced, RBA paper says
Rather than a ‘fundamental re-engineering’ of inflation targeting, central banks should adopt a flexible approach that pays some heed to output, authors argue
East African governors say structural measures needed to stabilise currencies
Senior central bank officials from Burundi, Kenya, Rwanda, Tanzania and Uganda identify measures necessary to ensure long-term stability of their currencies
Lockhart still expects rate hike this year
Atlanta Fed president still expects Fed to start tightening ‘sometime’ this year but market expectations of a September hike have fallen
PBoC steps in with rate cuts
Central bank cuts interest rates and reserve requirements amid deepening crisis, and uses the opportunity to push liberalisation agenda
Carney asked to review MPC code
Andrew Tyrie asks BoE governor to review MPC code of conduct and ensure it prevents committee members from having, or appearing to have, a conflict of interest
RBA paper finds distribution matters when assessing impact of wealth effects
Example of car buying highlights how different households adjust consumption in response to housing wealth effects, although channels remain unclear
Riksbank’s af Jochnick defends monetary policy stance
Interest rates cannot at present respond to growing risks in the housing market, Riksbank first deputy says, but they are helping to drive rising inflation and economic recovery in Sweden
Tenge plunges as Kazakhstan moves to free float
Pressure on currency forces central bank to abandon peg, although the government casts it as the next step in the shift towards inflation targeting
Trawl through BoJ archives reveals emergence of current policy-making
Study of failures and successes of BoJ policy-making in the 1980s reveals the emergence of current thinking about how best to conduct monetary policy
FOMC inching towards rate hike, minutes hint
Minutes of July meeting show some members are still concerned that labour market and inflation data are not strong enough for a hike, but several think the economy is nearly ready
BoJ’s Nakaso: ‘No serious problems’ with JGB liquidity
New data shows a drop in market depth, but QE is not threatened, says deputy governor
FOMC forecasts perform better in short- than long-term, Fed paper finds
Forecasts prepared ahead of FOMC meetings from 1997-2008 considerably outperform benchmarks at short horizons, but the results are much more mixed in the longer term
Iceland hikes again amid inflation shock
Large wage increases force central bank to reassess its inflation forecast and hike rates for a second meeting in a row, with more likely to follow
Turkey keeps rates level as lira hits dollar low
The Turkish central bank voted to keep its key policy rate unchanged despite a rapidly depreciating currency; under strong public pressure from Turkey’s president and his party
New York Fed researchers shine light on process of giving policy advice
Economists including head of research explain the process of briefing William Dudley ahead of FOMC meetings
China should ‘rein in’ vulnerabilities, IMF warns
Economy faces challenge in balancing reform and growth, with IMF warning of growing risks in the financial system and need for further rebalancing
Iceland’s Guðmundsson sees role for IMF as arbiter of capital flows
Small open economies are being forced to take sub-optimal actions to defend themselves from capital flows, and while global ‘rules of the game’ are far off, IMF monitoring could be a first step
RBA’s Kent seeks to explain divergent labour and growth outcomes
Assistant governor says range of factors may have contributed to a unexpectedly strong performance of Australian unemployment, even as growth remains subdued