Monetary Policy
China hints at policy adjustments to support economy
People's Bank of China pledges to strengthen the 'fine-tuning' of monetary policy in the country; latest indication of growing anxiety over slowing economy
Central Bank of Colombia paper finds delayed monetary policy responses
Working paper develops new models of output gap and neutral interest rate; argues interest rate changes by central bank lag behind movements in output
Bank of Israel warns of ‘lack of clarity’ in government fiscal policy
Report assesses domestic and external economic conditions affecting the Bank of Israel’s interest rate decision; low CPI, weak shekel and fiscal policy uncertainty contribute to rate hold
IMF urges Russian central bank to tighten policy
Article IV consultation recommends ‘gradual further tightening’ of monetary policy; preparation needed for informal inflation targeting in 2014
Bank of Albania’s Fullani justifies rate cut to historic low
Ardian Fullani explains the Bank of Albania’s decision to cut interest rates to record low; says inflationary pressure is muted and growth remains subdued
Bank of Uganda deputy calls for more empirical research in Africa
Louis Kasekende says policy-making in Africa is frequently made more difficult by limited empirical evidence; sets out a number of steps to improve quality of econometric analysis
People’s Bank of China makes growth top priority
Latest quarterly report on monetary policy puts growth of the economy at the heart of the central bank’s efforts; recent statistics show continuing slowdown in world’s second largest economy
IMF urges US policy-makers to take action against fiscal cliff
Conclusions of IMF Article IV consultation with US highlight risks from fiscal cliff and debt ceiling; calls on policy-makers to strike deal at ‘delicate juncture’ for world economy
Draghi says ECB ready to make further bond purchases
ECB president says central bank is prepared to intervene in sovereign bond markets to prop up ailing eurozone economies; ECB holds rates, as does Bank of England
Bank of Mexico deputy governor concerned by rising core inflation
Manuel Sánchez highlights increased inflationary pressure in Mexican economy; remains positive about country’s economic growth prospects
Central Bank of Chile paper supports unit root-based inflation forecasts
Working paper argues unit root-based models can create effective inflation forecasts; tests findings based on data from US, Canada and Sweden
Cleveland Fed researchers find fault with BoE’s Funding for Lending
‘Economic Trends’ research from the Federal Reserve Bank of Cleveland identifies possible flaws in the Bank of England’s Funding for Lending Scheme; warns of risk to independence
UK Funding for Lending Scheme opens
Bank of England and UK Treasury’s Funding for Lending Scheme window opens to UK banks and building societies; institutions have 18 months to borrow cheaply under the arrangement
RBI paper investigates relationship between liquidity types
Researchers study a variety of liquidity indicators to determine the links between them; argue that although there is a relationship, this nevertheless may not be a suitable guide to policy
Thailand reports improved economic conditions
Senior director of macroeconomic and monetary policy department notes overall better conditions in second quarter of 2012; European debt crisis has caused problems for export market nonetheless
India holds rates as growth expectation falls
Reserve Bank of India releases First Quarter Review of Monetary Policy 2012–13; holds rates, lowers growth prediction and raises inflation projection
National Bank of Serbia paper finds strong domestic bank lending channel
Working paper identifies 'significant' impact of monetary policy on domestic currency loan growth through bank lending channel; says channel is weak for foreign currency loans
Sarb’s Marcus discusses developments in central bank communication
Gill Marcus says communication has become ‘fundamental’ to central bank strategy, but suggests there are limits to usefulness of transparency
IMF paper highlights risks of higher inflation targets
Researchers assess the effects of increasing inflation targets; argue this can help prevent problems of a zero lower bound, but the overall impact on welfare is negative
Laos central bank ignores IMF advice
IMF delegation again recommends increase of reserve requirements for banks; Bank of the Lao PDR says it will not make the change yet
RBI paper finds monetary policy undermined by unsustainable deficits
Researchers assess link between high government debt and persistent inflation; find restrictive monetary policy may struggle to contain inflation if accompanied by a large budget deficit
Bank of Canada paper finds major benefits of QE in UK and US
Researchers study impact of asset purchases by Federal Reserve and Bank of England; identify ‘powerful effect’ on output and inflation
St Louis Fed research stresses importance of money
Working paper argues that money is essential in determining prices, despite monetary aggregates being largely ignored by central banks; says central banks have limited power over interest rates
Malawian governor unapologetic for reform pain
Charles Chuka says ‘when you mess up you pay the price’ and vows to plough on with economic reforms; blames past overvalued exchange rate for country’s problems