Monetary Policy
BoE report details ‘innovative’ liquidity insurance tool
Indexed long-term repos were introduced as part of liquidity facility upgrades after the global financial crisis, and are designed to automatically adjust to stress
Eurozone recovery set to broaden, says ECB bulletin
Report presents growing body of good news for most eurozone economies as wages and consumption rise, inflation bottoms out and investment begins to return
Norway moves policy tools in opposite directions
Norges Bank cuts rates to tackle economic slowdown but government imposes higher countercyclical capital buffer as financial stability indicators show signs of danger
Fed officials still back 2015 rate hike
Median of latest projections suggests federal funds rate will reach 0.625% by the end of the year; FOMC delivers more upbeat assessment as its keeps policy unchanged
Jordan: SNB does not expect ‘sustained’ price drop
Thomas Jordan says the Swiss central bank does not expect a deflationary spiral as inflation will return to ‘positive territory’ early in 2017
Nabiullina: Bringing down inflation still Bank of Russia’s main concern
Central bank governor tells parliament that inflation is still the ‘priority task’ despite announcing plans to rebuild forex reserves earlier in the month
PBoC top committee brings in seven fresh faces
China's central bank reshuffles top committee for second time this year, bringing in heavy-hitters from government and academia
RBA minutes note mixed signals for policy
Slight slowdown globally and nervousness over Greece and US rates offset by ‘solid’ lending growth, stronger employment and improved sentiment
EU court rules OMTs are legal
ECB is vindicated as ECJ rules in favour of crisis measure that would see the central bank buy potentially unlimited amounts of sovereign debt to protect ‘singleness’ of monetary policy
Bank of Israel launches journalist briefings as part of transparency drive
Central bank begins quarterly briefings of journalists and adds new publications as part of ongoing efforts to improve communications; follows consultations with other central banks
RBA’s Kent says transmission mechanism seems to be weathering shocks
‘Headwinds’ are working against the Australian economy but the evidence implies the monetary transmission mechanism ‘is about as effective as usual’, assistant governor says
Draghi defends ‘distributional consequences’ of QE
ECB president suggests easy monetary policy will benefit all citizens in the longer run; economists describe impact on inequality as “ambiguous” in research prepared for Econ Committee
Bank of Russia cuts key rate and moves to replenish foreign exchange reserves
Central bank continues easing cycle with 100bp cut, while stronger ruble gives room to replenish reserves
Governor wants freer thinking at 65-year-old Bank of Korea
Juyeol Lee hints at coming shake-up, calling for openness to ‘creative ideas’ as central bank prepares to set new inflation target
BoE minutes help markets shape expectations, paper finds
Working paper published by ECB finds markets make use of minutes when forming short-term expectations, but relationship breaks down over longer horizons
BoE’s McCafferty says UK not yet in ‘true deflation’
External MPC member says ‘dangerous but rare’ deflation has not taken hold in the UK, although inflation expectations have shifted down slightly
Sarb deputy wary of weaker currency with inflation rising
Daniel Mminele warns any ‘significant weakening’ in the South African rand in response to a Federal Reserve rate hike could cause inflation outlook to deteriorate
Weidmann sees bond reversal as ‘a kind of re-normalisation’
Bundesbank president argues sell-off is a ‘correction of market overshooting’ in the wake of ECB asset purchases; insists volatility is ‘not exceptionally high’ at present
Draghi defends ECB participation in private events
ECB president tells EU ombudsman that Benoit Coeuré did not reveal market-sensitive information at event in London in May; attributes late publication of speech to ‘internal miscommunication’
Virus outbreak prompts Bank of Korea rate cut
Deadly Mers virus a key factor behind central bank’s decision to ease policy as economic recovery shows signs of faltering
Kiwi slides as RBNZ cuts OCR to boost demand
Reserve Bank of New Zealand cuts key rate to 3.25% and suggests further easing could follow; kiwi drops to lowest level against US dollar in almost five years in aftermath
Dutch paper says theory of forward guidance must catch up with practice
Economists from the Netherlands Bank argue so-called Odyssean communication ‘does not exist in practice’ as central banks want to avoid committing themselves to a particular set of actions
Cleveland Fed economists cautious over use of Taylor rule
Research emphasises the difficulty in measuring potential output and the natural rate of unemployment accurately and urges policy-makers to ‘take care’ when using the rule
Iceland raises rates by 50bp and warns more will follow
Central bank says it will take ‘appropriate countervailing measures’ if the increase in government revenues from failed bank asset tax is used to stimulate the economy