Monetary Policy
Slew of central banks hold rates amid economic uncertainty
Riksbank, National Bank of Poland, Reserve Bank of Australia and Central Bank of Colombia all keep policy rates unchanged; central banks offer mixed message on global economy
Sarb makes $60m loss due to costs of forex intervention
South African Reserve Bank suffers loss in fiscal year 2011/12 due to cost of forex activities; governor describes economic challenges in coming year as ‘daunting’
Fed paper analyses core inflation measurement
Working paper attempts to produce optimal gauge of core inflation by excluding items with high variance; finds new index outperforms current measures ex-post, but is no better ex-ante
IMF issues updates on German and US economies
International Monetary Fund notes Germany’s “remarkable” economic performance; warns US over “tepid” recovery
Fed paper evaluates impact of QE
Working paper examines data from first round of Federal Reserve’s asset purchase programme; finds both immediate and longer-run effect of purchases on yields
RBI paper examines monetary policy transmission
Working paper studies channels of monetary policy in India; finds main impact made via interest rates but also identifies credit and asset-price effects
New leadership for Eastern Caribbean Central Bank Monetary Council
Chairmanship of ECCB’s Monetary Council moves to St Kitts and Nevis member; rate-setters leave key rates alone after reviewing mixed economic data
Peru central bank paper models interbank lending
Working paper develops New Keynesian model including an interbank lending market to analyse dual effect of reserve requirements and interest rates
National Bank of Hungary predicts stagflation
Quarterly inflation report projects growth contraction in 2012; says inflation is likely to persist above target due to government tax increases
New Zealand central bank publishes statement of intent
Statement emphasises commitment to price stability as “primary goal”; highlights need to adapt to macroeconomic environment in setting monetary and macro-prudential policy
Australia’s Debelle defends rate cuts
RBA assistant governor says central bank’s rate cuts will have an effect; argues housing market is stronger than many critics believe
King laments growing problems in global economy
BoE governor says worsening situation in emerging economies, slowing US growth and continued eurozone trouble leave him “pessimistic”; Treasury Committee member confronts MPC over decision-making
Iceland central bank governor discusses policy challenges
Már Guðmundsson reflects on difficulties that remain in removing capital controls and tackling high inflation; suggests that others could learn from the Icelandic model
Caruana says central bank credibility ‘must not be squandered’
BIS secretary general says reliance on central banks to provide extraordinary monetary policy to prop up the financial system is causing dangerous distortions; credibility may be ‘squandered’
Brazil and China agree currency swap and deepen cooperation
Central Bank of Brazil announces agreement with China Banking Regulatory Commission to enhance exchange of information; governments agree to currency swap
Czech National Bank paper studies changing inflation dynamics
Working paper examines causes of changing inflation dynamics in central Europe; finds inflation expectations play a 'substantial role' in price stability
BoE’s Weale discusses monetary policy challenges
Martin Weale paints bleak picture of the global economy; says new Bank of England schemes should help to support the recovery
Hungary proposes amendments to troublesome central bank law
Hungarian government puts forward amendments to widely criticised central bank law; discussions with concerned international bodies including the ECB and IMF are 'ongoing'
Bernanke says Fed ready for QE3 if necessary
Fed chairman explains FOMC decision to maintain rates and extend Operation Twist; says Fed is ready to make more asset purchases if necessary
Reserve Bank of India's governor defends policy stance
Duvvuri Subbarao responds to critics of the RBI’s tight monetary policy; says central bank’s actions are justified despite supply shocks and slowing growth
Fed extends Operation Twist to end of 2012
Federal Open Market Committee to continue programme to lengthen average maturity of its holdings of securities; target range for federal funds rate maintained at 0-0.25%
BoE minutes show dovish shift
Minutes from Bank of England monetary policy committee’s latest meeting reveal governor Mervyn King voted for an increase to the asset purchase programme in the UK; lost out in narrow vote
UK inflation unexpectedly drops again
Office for National Statistics reveals CPI annual inflation fell this month; leads to renewed QE expectations and predictions of on-target inflation figure by the end of the year
Romanian governor examines monetary policy transitions
Mugur Isărescu considers changes to Romanian monetary policy in response to changing economic environment; says policy requires an understanding of theory but must be grounded in economic reality