Monetary Policy
UK inflation drops to 0.5%
Consumer price inflation falls to its lowest level since records began, prompting Mark Carney to write his first explanatory letter to the UK chancellor; governor stresses immediate benefits
Central Bank of Azerbaijan hits back at FX critics
Forex interventions made in 2014 – buying foreign currency throughout the year and then reversing the trades in a single month – were essential for maintaining stability, central bank says
Prolonged weakness of Mexico’s peso could impact inflation, says central bank deputy
A weakening of the Mexican peso could lead to a pick-up in inflation and ‘should be carefully monitored’, says Manuel Sánchez
Israeli research finds monetary policy is ‘dominant factor’ on short-term yields
Paper published by Bank of Israel examines impact of monetary and fiscal policy on government bond yields; finds the influence of government debt has ‘strengthened’ in past decade
Tombini: Central Bank of Brazil to do ‘whatever is necessary’ to hit inflation target
Brazil central bank ‘will do whatever is necessary’ to ensure inflation enters into a ‘long period of decline’ from this year onwards, governor says
Bank of Mexico expects inflation back on target in 2015
Inflation in Mexico ended the year slightly above target, at 4.08%; Agustín Carstens expects it will converge to the goal of 3% ‘from mid-2015’
Fed earns $116bn on QE assets in 2014
Regional Fed banks transfer just under $100bn in earnings to US Treasury, a 27% increase on the previous year; operating expenses totalled $3.6bn
Economics in Central Banking: Claudio Borio
The Bank for International Settlements’ economics head secures win for his work applying the concept of ‘excess financial elasticity’ to the international monetary and financial system
Belarus central bank hikes key rate by 500bp
National Bank of the Republic of Belarus announces raft of measures to stabilise country's exchange rate; increases policy rate and reinstates currency basket peg
Central bank expects Serbian FX market to stabilise
National Bank of Serbia reveals it sold €1.8 billion and bought €260 million at various points last year in an attempt to ‘ease short-term volatility’ in exchange rate
FOMC member says ‘very low' inflation provides ‘ample justification' for patience on rate hike
Eric Rosengren highlights ‘unusual set of conditions' as Fed looks to normalise policy stance; says low inflation globally may prompt an atypically gradual normalisation process
SNB expects profit of $39 billion for 2014
Foreign currency positions responsible for most of the profit for Swiss National Bank, which increased its forex reserves by 7% in December following exchange rate pressure
Riksbank ready to launch new measures ‘at short notice'
Swedish central bank prepared to launch unconventional measures in February, minutes reveal; board member says currency interventions inappropriate as other countries struggle
Fed signals rate hike despite drop in inflation
Minutes suggest Fed will tighten policy despite expecting inflation to remain below target for 'some time'; rate hike unlikely for 'at least the next couple of meetings'
Bank of Jamaica set for new powers in 2015
Central bank on track to assume responsibility for financial stability; will start conducting annual reviews to track ‘readiness’ for full-fledged inflation targeting
Eurozone inflation goes negative with QE looming
Annual HICP inflation falls to -0.2% in December due largely to plummeting oil prices; expectations rising for ECB to expand asset purchases on January 22
Polish paper examines impact of different loan types on policy efficacy
Researchers from Polish and Norwegian central banks consider how the different characteristics of residential mortgage markets influence the workings of monetary and macro-prudential policy
State Bank of Vietnam devalues dong as dollar rises
Vietnam’s central bank devalues the dong by 1% against the dollar, in a move to create ‘sustainable stability’ in the forex market
Bank of Korea paper examines global liquidity drivers
Researchers at central bank explore transmission of global liquidity shocks from advanced to emerging market economies; warns there is no ‘silver bullet’ response
Sri Lanka reduces inflation target range by 200bp
The Central Bank of Sri Lanka will aim to keep inflation between 2% and 4% in 2015, after a fall in prices and in some key commodities. From 2016 on, the bank will aim for 3% to 5%
Impact of ECB unconventional policies depends on bank capitalisation, finds Belgian paper
ECB crisis measures have greater impact on GDP growth in countries where banks are well capitalised, researchers find
BIS paper finds US spillovers impact through long-term rates
Researchers show US monetary policy spills over into Asian economies mainly through long-term interest rates and suggest policy options
Bernanke laments scripted policy meetings
Former Fed chair tells Mervyn King that meetings are ‘deadly boring’ as most of the work is done in advance; both men reflect on the crisis for BBC Radio 4’s Today programme
BoE research identifies strong impact from long-term unemployment on inflation
Working paper finds evidence that models incorporating linear Phillips curves are underestimating the effect of long-term unemployment on wage inflation