Monetary Policy
A welcome return to money
Central banks’ renewed in interest in the importance of money is to be applauded. But they must also consider the right money measure and how changes should impact policy, Gabriel Stein argues
China to drop dollar peg “sooner or later”: Zhou
Chinese central bank chief Zhou Xiaochuan hints the country will soon remove the dollar peg on its currency, analysts see a slow and steady revaluation rather than large one-off move
Credit channel working in Korea
Bank of Korea paper uses data from Korean firms to build on academic research on credit channels
Israel held on low inflation figure
Minutes show Bank of Israel’s Stanley Fischer opted to leave the interest rate for March unchanged at 1.25% as CPI inflation remained low for a successive month
Brussels and Paris push for European monetary fund
Finance ministries of France and Germany begin devising proposals for Europe’s own Fund, body would be geared at removing bailout security net as well as providing help to euro countries
Volcker lambasts higher inflation targets
Former Fed chairman Paul Volcker calls the suggestion that inflation targets should be raised to about 4% “nonsense”; points to the difficulties of the 1980s
Hildebrand, Weber condemn calls for higher inflation targets
Swiss and German central bank heads label IMF chief economist’s argument “seriously flawed”; deem timing “highly unfortunate”
Malaysia hikes as recession ends in emerging Asia
Bank Negara Malaysia raises its key rate by a quarter percentage point, citing stronger than forecast growth results in emerging Asia
Ghana’s Amissah-Arthur explains early 2009 hike
Bank of Ghana governor Kwesi Bekoe Amissah-Arthur says the West African country’s government has made vital progress in cutting spending, allowing key rates to be lowered
Austria’s Nowotny: power of rating agencies unacceptable
National Bank of Austria’s Ewald Nowotny says agencies’ role in fate of Greece too great
Nigeria slashes deposit rate to ease lending
Central Bank of Nigeria knocks 100 bps off deposit rate and extends quantitative easing programme to promote lending to the real sector
Australia hikes on further evidence of recovery
Reserve Bank of Australia raises cash rate to 4% as Stevens says economy in the clear
Discretionary policy with Calvo pricing: Kansas Fed paper
Kansas Fed research shows that sticky price models, such as the Taylor and Calvo variants, are not identical, and can have important policy implications
The simulation of inflation forecasting
IMF research asks how useful is a simple Phillips Curve in simulating inflation forecasting in real time in Germany, the UK, and the US?
Turkey – February 2010 rate minutes
Committee flags improving credit markets and rising inflation
IMF should have come to emerging markets’ rescue: DSK
International Monetary Fund managing director Dominique Strauss-Kahn says it should have been the Fund, not the Fed and other central banks, which provided swap lines to emerging markets in the crisis
High debt heralds new rate policy: UK shadow chancellor
George Osborne says high level of public debt will prompt reappraisal monetary policy
MPC’s Miles leaps to the defence of QE
Rate-setting committee’s external member David Miles says the Bank’s asset purchase programme has shored up the private sector despite focus on gilt purchases
Bulgaria relaxes capital adequacy rules
Bulgarian National Bank announces adoption of further countercyclical capital measures, reducing risk weights on retail and real estate exposures by 25 and 15 percentage points
Taylor rule has not removed need for judgement: RBI’s Subbarao
Reserve Bank of India governor Duvvuri Subbarao says the celebrated monetary policy rule provides a policy basis, but central banks need to apply it with relativism
ECB’s Stark rejects calls for higher inflation target
Senior European Central Bank official pans IMF chief economist’s suggestions of a higher inflation target
Brazil jacks reserve ratio up by 200 bps
Central Bank of Brazil lifts reserve requirement ratio back to pre-crisis level, move is expected to withdraw more than 70% of liquidity provided during crisis
How the Taylor rule changed central banking for good
Kansas Fed paper shows that the rule had widespread influence and changed policymaking even when it was not adopted outright
Discount hike was to discourage reliance on Fed: Bernanke
Federal Reserve chairman Ben Bernanke reiterates the central bank’s stance that its recent discount rate hike was in no way a policy tightening, flags term deposit facility