Monetary Policy
PBoC cuts interest rates for third time since November
Central bank also lifts cap on deposit rates; moves will do little to stimulate growth amid property glut, analysts predict
Romania slashes inflation forecast with VAT cut on horizon
Latest forecast has inflation falling to 0.2% at the end of the year, before rising to 1.9% a year later; Central bank cut key rate by 25bp earlier this week
Malta names Alfred Mifsud as deputy governor
Former chairman of Crystal Finance Investments joins the central bank as a deputy governor; he will ‘primarily’ focus on monetary policy during his five-year term
Riksbank paper warns forecasts often overestimate inflation
Forecasting error has grown in recent years and tends to overstate inflation, paper says, even as first deputy governor says expansionary policy has contributed to rising inflation
Atlanta Fed president focused on consumer spending
Dennis Lockhart says evidence of an increase in consumer spending would give him more confidence that growth is back on track in the United States
Ingves draws lessons from Sweden’s economic history
Riksbank governor emphasises the close link between financial stability and monetary policy, while promising to take further action ‘with force’ if necessary
Deeper markets in WAEMU could boost policy transmission
Research published by the IMF finds the transmission of monetary policy is impeded by ‘shallow’ financial markets in the West African Economic and Monetary Union
Gieve: BoE rate hike likely to hinge on election outcome
Former deputy governor John Gieve says victor in May 7 poll will impact BoE’s tightening decision; panellists warn of high uncertainty as no party likely to win outright majority
NBER paper challenges Rey’s monetary policy dilemma
Authors find evidence to support the continued existence of a traditional monetary policy trilemma, casting doubt on Hélène Rey’s theory that the trilemma has broken down
San Fran Fed research analyses link between inflation targeting and growth
In an economic letter, two researchers find developing economies tend not to experience the same short-term bump in growth rates as advanced economies after adopting a target
Australian dollar jumps despite RBA rate cut
Australian central bank cuts benchmark interest rate to 2%; governor Stevens says currency depreciation 'necessary' amid falling terms of trade
Japan shows signs of inflation rebound
Inflation creeps back into positive territory after hitting zero in February, as research by the Bank of Japan suggests inflation may have moved to a new, higher trend
Fed’s Mester calls for more work on monetary policy and financial stability nexus
Loretta Mester sets out three priorities for research on the consumer credit markets in the United States at conference in Philadelphia
IMF encourages Tonga to adopt ‘reference rate’ for inflation
IMF recommends the National Reserve Bank of Tonga adopt a reference rate of 3.5%; central bank says it needs to analyse the appropriate level before making the jump
Romanian governor calls for adjustments before joining ERM II
Mugur Isărescu says aim of adopting euro in January 2019 is ‘highly ambitious’ on account of the reforms necessary to ensure sustainable convergence
Impact of Fed’s QE often larger in EMs than US, research finds
IMF working paper examines cross-border effects of unconventional monetary policy in the United States using a global vector error-correction model
Longer-term inflation expectations pick up in eurozone
In its latest economic bulletin the European Central Bank shows how some measures of expectations, including the five-year inflation-linked swap rate five years ahead, are recovering
BIS economists say investor behaviour key to understanding EM challenges
Hyun Song Shin and Philip Turner consider implications of shift in financial intermediation for emerging markets; part of wider Banque de France review on the subject
Bank of Japan cuts inflation forecast
BoJ retains asset purchases at current levels and says underlying inflation is rising steadily; expects to hit target in second half of 2016
Riksbank ramps up QE
Asset purchase programme doubled but unexpected rate hold sees krona move higher; Riksbank highlights both signs of recovery and rising financial stability risks in new monetary policy report
Norges Bank’s Olsen backs ‘leaning against the wind’
Øystein Olsen presents evidence in favour of using monetary policy to lean against financial imbalances, which he says smooths inflation and output in the long run
Singapore inflation to ease before rising at end of 2015
CPI inflation could be negative on a year-on-year basis for consecutive months, which MAS says reflects ‘falling car prices, housing rentals, and costs of oil-related items’
RBA paper finds only weak support for sticky information Phillips curve
Paper provides ‘first estimates’ of a sticky information Phillips curve for Australia, finding the curve fits poorly with the inflation-targeting era but better in earlier years
Carstens expects Mexican inflation to end year at 3% target
Bank of Mexico governor expects inflation to end the year at 3% target, but does not rule out an interest rate increase if prices start to rise due to a weaker peso