Monetary Policy
Israel and Turkey cut rates, hinting at further easing
Bank of Israel eases with one eye on the appreciating shekel; Turkey stands by its ‘cautious’ stance on interest rate cuts with 25bp reduction
Carney defends eurozone comments
Parliamentary committee questions appropriateness of BoE governor calling for fiscal union in Europe; Carney admits authorities outside eurozone were keen for him to make the comments
Italian paper: Reforms could lead to earlier exit from ZLB
Working paper examines the impact of competition-friendly reforms in the service sector across the eurozone, finding it could help boost inflation providing investment responds
Azerbaijan devalues currency by a third
Central bank follows up last week’s decision to abandon its peg in favour of a currency basket by devaluing the manat by 34% against the US dollar
IMF eyes stronger transmission mechanism in Paraguay
Latest staff report advises the Paraguayan authorities to promote a ‘well-functioning’ interbank market and create stronger incentives for ‘de-dollarisation’ in the economy
Saccomanni sees political not analytical constraints to policy cooperation
Former Bank of Italy deputy says analytical framework for international monetary policy cooperation already exists, but G-20 countries are being held back by politics
Canadian deputy reveals new indicator of inflation expectations
Bank of Canada launches new household survey; Agathe Côté says the 'power of our new tool will truly reveal itself’ after a couple of years, but early indications are ‘promising’
Fed officials grapple with lift-off details
Minutes from January FOMC meeting reveal extensive discussion about the tools at the Fed’s disposal when it wants to raise rates; idea of higher cap for overnight RRPs explored
Serbian central bank sees inflation climbing to target in 2015
General manager Branko Hinić discusses latest forecasts at the launch of the National Bank of Serbia’s latest inflation report; attributes low inflation in 2014 to ‘temporary’ factors
ECB publishes first minutes
European Central Bank releases an ‘account’ of the discussion at the governing council meeting in January, which saw it launch quantitative easing in the eurozone
Estonian governor tells MPs central banks cannot create long-term growth
Ardo Hansson says QE in the eurozone will help to improve confidence, but reforms are necessary for investors to believe the economy will grow
BoE’s MPC members diverge on interest rate outlook
Only common ground between committee members is rates likely to rise ‘over the next three years’, as some see the potential for further easing while others want rate hike soon, minutes show
Fed hawk Fisher receives Mexican eagle award
Richard Fisher granted Order of the Aztec Eagle by Mexican president; Agustín Carstens praises the Dallas Fed president’s use of ‘simple and straightforward’ language
Hungarian central bank taking on credit risk from SME loans
Extension to ‘funding for growth’ scheme sees central bank extend another 500 billion forint in cheap funding to banks and take on some of the credit risk from their loans to SMEs
Fed officials see ‘audit’ bill as threat to independence
Charles Plosser is the latest FOMC member to criticise bill that could see monetary policy decisions reviewed; Richard Fisher and Jerome Powell also raise concerns
Jordan laments ‘significantly overvalued’ franc
Some of the ‘overshooting’ that occurred in the wake of the SNB’s decision to withdraw its currency cap has been corrected, but Jordan argues the franc is still too strong
BIS paper finds stabilisation policy can impact long-run growth
Use of short-run interest rates has implications for long-run growth due to their effect on credit and liquidity supply, BIS working paper finds
Poll: Should inflation targets be scrapped?
As advanced economies battle low inflation and interest rates remain constrained by the ZLB, should central banks rethink monetary policy orthodoxy?
A more effective strategy for the Fed
The Fed should adopt a Taylor-rule approach to ensure policy adjustments are only made due to changing macroeconomic fundamentals. This would mean it should raise rates and alter its communications
Ukraine unveils nine-member MPC
Central bank reveals composition and meeting schedule of new monetary policy committee, a body created to help ‘streamline’ the decision-making process
Three strikes against the Federal Reserve
If you want to know why US economic recovery has been so sluggish, look no further than the policies of the Federal Reserve, argues Allan Meltzer
PBoC report reveals extent of liquidity interventions
Quarterly monetary policy report reveals massive injections of liquidity to support the money supply as outward capital flows continue to accelerate
Weidmann: Risk of self-reinforcing deflation ‘very low’
Bundesbank president says there was ‘no immediate need’ for QE in the eurozone, while impact of lower oil prices on HICP could be ‘short-lived’
BIS paper asks why bank and central bank rates diverged post-crisis
Authors argue direct comparison of commercial and central bank interest rates is misleading; the relationship between the two has remained stable but funding costs have risen