Monetary Policy
BoE and BoJ shun further easing as economic activity picks up
Both the Bank of England and Bank of Japan keep their interest rates and asset purchases unchanged as their respective recoveries work up a head of steam
NY Fed staff say effect of policy changes depend on risk environment
New staff report argues that macro policy announcements affect asset prices to different extents depending on the existing economic outlook; when risk is elevated, the impact is reduced
Haldane says central banks have ‘further to go’ to improve communication
Bank of England executive director Andrew Haldane says policy-makers are still searching for a language that resonates with the general public
New York Fed paper wary of higher inflation targets
Staff report finds that pursuing a higher trend rate of inflation would likely create a ‘more volatile and unstable’ economy and unseat inflation expectations
BIS papers study effects of monetary and fiscal policy shocks
Researchers find fiscal shocks within the eurozone lead to a real exchange rate appreciation through inflation differential; monetary policy shocks have minor impact on commodity prices
East African central banks take different approaches to rising inflation
Bank of Uganda hikes key rate by 100bp to 12% as food shortages push crop prices up by 16% in August; Central Bank of Kenya dismisses own inflationary pressures and holds rates
ECB's Cœuré defends OMTs in Berlin speech
Executive board member tells German audience that OMTs do not remove the incentive from governments to reform, and says risk transfer within the monetary union is unavoidable anyway
RBA quiet on further easing as it holds rates
Reserve Bank of Australia holds its key policy rate at 2.5% and omits earlier guidance on the prospect of an additional rate cut from accompanying statement
Net lending to UK businesses still negative, BoE data shows
Second quarter figures for the UK's Funding for Lending scheme shows credit creation remains subdued; Bank of England attributes weak performance to alternative funding sources
Segmented structure of Russian interbank market leads to volatile interest rates
Liquidity-absorbing and liquidity-provision operations are conducted by the biggest banks, reducing credit risk but also restraining market development, according to Bank of Finland discussion paper
Polish paper presents new method for constructing fan charts
Fan charts are an increasingly popular tool for depicting forecasts; working paper proposes a new method for formulating the charts that incorporates 'a mix of judgment and statistics'
IMF paper finds less tail risk in immediate aftermath of QE
IMF working paper finds ‘strong evidence' that unconventional monetary policy led to a reduction in market uncertainty, in turn contributing to an easing in financial conditions
Fed struggles with same issues as 100 years ago, says Lacker
There has been a debate over which assets the Fed should hold since its founding in 1913, Richmond Fed president Jeffrey Lacker says
Tough tests ahead as Rajan prepares for RBI top job
Raghuram Rajan holds many of the skills required to govern the RBI, but he will face substantial monetary policy, governance and financial stability challenges, a new Central Banking article finds
Prasarn hails prudent policies allowing Thailand to weather storm
Thailand's international reserves have meant the central bank has not had to raise interest rates to prop up the currency, says governor; hails ‘credible' monetary policy for ‘fostering growth and stability'
Decline in expected real interest rates 'key' to Japanese growth
Kikuo Iwata says inflation expectations will raise aggregate demand through the transmission mechanism of lower real interest rates; calls change in public mindset key to policy success
Indonesia raises rates in unscheduled meeting to rescue the rupiah
Bank Indonesia raises interest rates in attempt to slow the fall in the value of the rupiah; observers fear the move will hit economic growth
Bank of Brazil hikes rates for the fourth time in as many months
Brazilian central bank deploys primary monetary policy weapon in a bid to hold back inflation and open another front to support the real, following intervention in the currency markets
Canada deputy says QE exit may be ‘more benign’ than critics fear
Despite Canada’s close ties to the US, Bank of Canada deputy governor John Murray believes tapering of Fed asset purchases will have less of a negative impact than many pundits fear
Rajan faces daunting challenges as he takes over as RBI governor
Raghuram Rajan faces a raft of monetary policy, governance and financial stability challenges when he takes over as governor of the Reserve Bank of India next week, writes Hugh Sandeman
Carney's BoE walks fine line between stimulus and financial stability
Bank of England governor Mark Carney’s maiden speech includes announcement of relaxation of bank liquidity rules; insists the central bank is in charge of interest rates, despite market moves
Bank of Jamaica will continue to tighten liquidity conditions
Governor Brian Wynter says central bank will keep on issuing ‘special securities’ to ensure exchange rate stability; unconcerned by recent increases in inflation rate
Forward guidance successful in mitigating downside risks to price stability
Provision of time-based forward guidance reduces downside price stability risks but may result in upside risks during the medium term, finds ECB working paper
Kuroda believes QQE has started to ‘exert effects’
Bank of Japan governor Haruhiko Kuroda says the radical easing plan unveiled in April has led to a ‘favourable turn’ in the country’s finanical markets, public expectations and economic activity