Monetary Policy
Curaçao governor ‘baffled’ by bond market reluctance
Emsley Tromp extols the value of innovation in monetary policy, and expresses his bemusement at the region’s apprehension over the creation of a corporate bond market
RBI takes hawkish stance against inflation with another rate hike
Repo rate hike and MSF rate cut bring spread back to its normal level of 100 basis points; ‘material' risk of entrenched inflation could mean another hike is on the way, says DBS economist
BoJ’s Iwata draws lessons from ‘Takahashi economic policy’
Current Bank of Japan deputy examines former governor and finance minister’s success in lifting Japan out of deflation in the 1930s; underlines importance of expectations, both past and present
Canadian research finds drop in uncertainty following policy changes
Bank of Canada working paper presents evidence that uncertainty over interest rates in Canada fell after recent changes to monetary policy including forward guidance
German researchers present indicator of interbank market stress
Bundesbank discussion paper says banks’ bidding behaviour in Eurosystem’s weekly refinancing operations reflect conditions in the interbank market
Bank of Thailand lowers growth and inflation forecasts
Central bank says Thailand’s rising debt burden and falling consumer confidence are holding back domestic demand, which in turn is slowing the pace of growth and inflation
PMA attributes inflation disparity to Egyptian smuggling
The Palestine Monetary Authority blames the divergence between inflation in the West Bank and the Gaza Strip partly on the cheap goods being smuggled into Gaza from Egypt
Bank of Canada holds rates despite drop in growth and inflation forecasts
Governing council holds key policy rate at 1% despite suggesting inflation will take two years to return to target; says economy is rebalancing but the process will ‘take longer than previously projected’
OECD tells Brazilian government to stay quiet on interest rate policy
New report urges government to stop commenting on future trajectory of interest rates, and set fixed terms for MPC members ‘during which they cannot be dismissed'
Productivity still a puzzle for Bank of England MPC
Latest minutes show the monetary policy committee still does not really understand what is driving falling unemployment and rising productivity; inflation pressures seen softening slightly
Central Bank of West African States facing broken transmission mechanisms
Members of the IMF’s African department find the central bank’s ability to influence liquidity conditions in the WAEMU is restricted by the union’s ‘shallow’ financial system
Woodford forward guidance an ‘academic curio', says BoE's Bean
Deputy governor says Bank of England cannot commit to low interest rates for as long as Woodford and Eggertsson would advocate; concedes financial stability knockout in guidance may be ‘material'
Bank of Russia slashes forex intervention target
Halved intervention target brings rouble closer to free-float; IMF tells central bank to maintain reform momentum and resist calls to loosen policy
Cypriot board member breaks ranks to criticise Demetriades
Alexandros Michaelides accuses central bank governor of a lack of professionalism for cancelling board meeting ahead of troika visit; demands greater respect
China should be in ‘no hurry’ to relax capital controls, says ADB paper
Working paper makes recommendations for Chinese fiscal and monetary policy, including maintaining control over exchange rates and taking steps to curb the growth of shadow banking
Taper surprises could cause more volatility, warns Mexico deputy
Structural reforms should put the Mexican economy on a stronger footing, deputy governor Manuel Sánchez says, but warns economic rebound could suffer from tapering without stronger US growth
IMF paper warns half-hearted Japanese reforms would push up long-term rates
Researchers say long-term yields and banks’ interest rate exposures will increase if structural and fiscal reforms are not seen through to the end
Central Bank of Chile cuts interest rates for first time in 18 months
Central bank cuts rate 25bp to 4.75%, amid slowing demand growth and below-target inflation; analyst says inflows, not outflows, biggest concern despite current account deficit
Fed's Fisher slams ‘fiscal misfeasance’ of US government
Dallas Fed president urges American politicians to show some leadership and put the US on a more sustainable fiscal path; Cleveland Fed researchers say shutdown will damage inflation estimates
Praet says household heterogeneity key to understanding transmission mechanism
New Household Finance and Consumption Survey can bring new insights into how individual households are affected by economic shocks, says ECB chief economist
IMF paper sets parameters for model short-term real interest rate
Working paper sheds light on a ‘crucial' but overlooked question - and shows that the elasticity of interest rate volatility plays a crucial role in explaining real interest rate dynamics
BIS' Caruana identifies ‘new' threats to central bank credibility
Central bank independence is under pressure from unprecedented monetary policies, says BIS manager; argues banks' ‘credibility in fulfilling their mandates' is at stake
BoE breaks ground with live Twitter Q&A
Bank of England chief economist Spencer Dale will answer questions on monetary policy and forward guidance through the central bank’s Twitter account tomorrow morning
CNB's Lízal sets out case for forex intervention
The use of forex interventions to ease monetary conditions in an open economy is a rational choice at the zero lower bound, Czech National Bank board member tells finance conference