Monetary Policy
Danish central bank prepared to cut rates further in defence of peg
‘We haven’t yet found any absolute lower bound' for the deposit rate, Danish governor tells Central Banking, but acknowledges potential for strain on payments system
Belarus eyes policy overhaul
National Bank of the Republic of Belarus says it will exercise ‘tight control’ over the money supply in an effort to shackle inflation; questions over where this leaves exchange rate peg
Boston Fed’s Rosengren flags key elements of successful QE
Eric Rosengren sets out the most successful design features from the Fed’s experience of quantitative easing and hints ‘other parts of the globe’ may have acted too late
Denmark cuts deposit rate for fourth time in three weeks
Governor Lars Rohde says central bank will defend peg to euro ‘for as long as it takes', adding there is ‘no upper limit' to FX reserves as key rate is cut to -0.75%
Weidmann prescribes dose of discipline for eurozone
Bundesbank president says governments must accept liability for their own fiscal actions; sees no ‘urgent need’ for QE and warns of policy side effects
Ukrainian hryvnia drops 30% after central bank action
Currency in freefall after National Bank of Ukraine scraps subsidised forex auctions and simultaneously increases its key discount rate by 550bp
ECB’s collateral move adds pressure to Greek negotiations
Decision to cease accepting some Greek debt as collateral two weeks earlier than necessary turns banks toward ELA and adds pressure to political negotiations
Meltzer accuses Fed of three ‘major’ errors
Writing in the Central Banking Journal, Allan Meltzer argues the Fed continued QE for too long, while relying too heavily on ‘noisy’ data and too little on monetary and credit aggregates
PBoC takes action against tighter liquidity
Cut in reserve requirements seen as effort to ease liquidity due to lunar new year and capital outflows, but may do little more than offset a growing shortage
BoJ’s Iwata says QQE is a break with history
Deputy governor says latest asset purchases programme a sign of dramatic ‘regime change’ and consumers will have to respond – it is just a question of when
Prasarn dismisses threat of deflation as headline rate goes negative
Thai governor pens letter to finance minister after headline inflation falls to -0.4% in January; IMF sees ‘scope for further easing' as two MPC members dissent on rate hold
New York Fed unveils new way to calculate funds rate
Central bank plans to base the rate on a new dataset that captures a broader range of market activity; move likely to happen in about a year’s time
FOMC members too bullish on growth, researchers at San Francisco Fed say
‘Persistent overoptimism' about future growth since financial crisis may be due to overestimation of monetary policy efficacy following a balance-sheet recession, authors find
Stevens gloomy on growth as RBA cuts
RBA governor warns Australian economy is showing greater signs of weakness than previously thought, in a statement announcing a cut in the interest rate to record low
Rajan says RBI is seeking ways to encourage foreign investment
RBI tightens rules for foreign investors but Rajan says central bank is looking into ways of encouraging desirable FDI flows; rates remain on hold
Constâncio: ECB ‘encouraged’ by reaction to QE
ECB vice-president points to rise in price of equities and bonds and drop in the exchange rate, but warns against reading too much into financial and real variables
IMF calls for reform at Madagascar central bank
Staff report says central bank needs greater independence and stronger oversight mechanisms; new audit committee on the way and government agrees to recapitalise institution
Denmark suspends bond sales to stem FX inflows
The move, intended to lower longer-term yields and thereby discourage upwards pressure on the krone, ‘effectively works as QE' says analyst
ECB’s Cœuré calls for tougher rules on structural policy
Executive board member says a ‘strong framework’ is needed to manage the interdependence of fiscal, financial, structural and monetary policies in Europe
IMF backs Canada cut despite overvalued housing
Fund says central bank's decision to lower rates for first time in four years is ‘in line with staff advice'; says housing market overvalued by up to 20%
Bank of Russia cuts key rate by 200bp
Central bank cuts rate to 15% just one month after raising it by 650bp to 17%; points to the risk of a ‘sizeable decline in economic activity’ as the motivation for the decision
Brazil's central bank says inflation progress ‘not enough’
A rise in regulated prices is fuelling Brazil’s inflation, which rose 6.69% in January; minutes from latest MPC meeting suggest dissatisfaction with level despite rate hikes
Denmark cuts rate for third time in 11 days
Danish central bank cuts its deposit rate for the third time since the Swiss National Bank decided to abandon its exchange rate commitment; rate now sits at -0.5%
Kganyago: Sarb taking ‘pause’ in normalisation
South African Reserve Bank holds repurchase rate at 5.75%, but monetary policy committee agrees the ‘lower inflation path’ creates the chance to ‘pause’ its tightening cycle