Monetary Policy
Market expectations respond to contractionary shocks, Chilean paper argues
Monetary expectations in major eurozone economies are responsive to contractionary shocks but not expansionary ones, a paper published by the Chilean central bank argues
Hungarian council reflects on gradual pace of rate cuts
Several council members suggest the Central Bank of Hungary was able to make a series of ‘cautious reductions’ in the interest rate because it had gained credibility
Bank of Central African States floats novel way of pooling reserves
IMF urges member states in Central African Economic and Monetary Community to comply with requirement to pool FX reserves and earnings; BEAC proposes new method for achieving this
IMF paper warns Japan’s QQE may hit the buffers in 2017
Bank of Japan may have to look for new forms of monetary stimulus as it runs up against a shortage of government bonds, which could begin to distort markets
Stevens says RBA is working to ‘assess and contain’ housing risks
Statement following decision to hold rates notes house prices rising ‘strongly’ in Sydney, although growth is uneven between regions; other assets also buoyed by low rate environment
RBI and government reach ‘broad consensus’ on MPC
Raghuram Rajan says the central bank and government have found common ground on the shape of the monetary policy committee; RBI holds rates and nudges down inflation forecast
Israel grapples with high house prices and low inflation
Monetary policy report flags concerns by committee members that low interest rates may be fuelling high and rising house prices, but overall the risks to inflation are seen as more severe
IMF warns on sanctions impact as Russia cuts rates
Article IV report highlights problem of high inflation and low growth, coupled with financial instability resulting from sanctions, and calls for rate cuts to continue at a 'prudent pace'
Fed communication driving Trinidad and Tobago policy
Trinidad and Tobago MPC cites Fed guidance on interest rates as the ‘most influential factor’ in its decision to tighten monetary policy
BoE unveils plans for enhanced data gathering
Central bank hopes improved data gathering will allow it to produce more accurate interest rate benchmarks, and inform financial and monetary policy work
BoJ paper finds emerging markets struggled to protect themselves from QE
Foreign exchange interventions and capital flow policies did little to shield emerging markets from the spillovers caused by quantitative easing in the US
Fed leaves door open for rate hike
FOMC statement offers hints that the US labour market is reaching a position where a hike could be possible, indicating interest rates are still expected to rise this year
ECB article examines lack of real convergence in eurozone
Article in latest bulletin points to three factors behind the lack of sustainable real convergence among the countries in eurozone since the creation of the monetary union
Wheeler aims to get NZ inflation back to target within a year
RBNZ governor looks to return inflation to around 2% within 12 months; reiterates further easing is likely
BoJ paper builds model of secular stagnation
Authors find scrapping the idea of a single representative household allows New Keynesian models to portray secular stagnation – and a high inflation target fixes the problem
Gertjan Vlieghe to replace Miles on BoE monetary policy committee
Economist used to be assistant to Mervyn King and is now partner at an asset manager; previous research has focused on conducting monetary policy in the presence of imperfect credit markets
RBI automates liquidity operations
Central bank launches straight-through processing for three of its liquidity operations, cutting settlement times as part of broader efforts to enhance liquidity management
IMF flags potential scarcity of sovereign bonds in Europe
‘Selected issues paper’ warns a shrinking pool of securities could ‘pose challenges’ to the implementation of the ECB’s quantitative easing programme
ECB bulletin: Too early to tell if inflation has turned a corner
Inflation in the eurozone appears to be moving upwards, but strip away transitory factors and the picture becomes much more blurry
Bank of Korea researchers dig into disaggregated data on inflation targeting
Adopting inflation targeting in Korea lowered the mean, volatility and persistence of inflation throughout the country, but a look at disaggregated data reveals more about transmission
BoJ’s Nakaso highlights changing behaviour of firms
Firms are increasingly investing and facing tighter labour market conditions, with record profits and higher wages providing a boost to the economy, but inflation is still stuck low
Fed mistakenly releases confidential staff forecasts
Economic projections show staff expect a more gradual pace of rate increases than most Fed officials; supposed to be released to public with a five-year lag
RBI could see interest rate powers diluted by MPC proposals
Indian government publishes draft law that would establish an MPC dominated by external members; investment bank economist concerned by shortage of potential candidates
IMF paper offers Uruguay advice on money supply targeting
Move to new monetary policy target has proved ‘challenging’ IMF researchers note, offering advice on how to make the framework more effective