Operating framework
Rate delay could deprive Fed of tools in future, warns Mester
Cleveland Fed president says there is a “non-negligible chance” unconventional tools will be deemed as “ultimately ineffective” by the public if the Fed is too slow to normalise policy
Bhutan readies to sharpen ‘blunt’ policy instruments
Royal Monetary Authority of Bhutan considering improvements to policy transmission; could involve new lending and deposit windows, departure from current base rate practices
Reserve Bank of Malawi to improve monetary policy architecture
Bank moves towards fully fledged inflation targeting, embracing interest rate-based framework; IMF staff note importance of maintaining tight monetary policy
Rajan has left his mark but risk of fiscal dominance remains
Vishrut Kansal examines the legal framework Raghuram Rajan’s successor will face, arguing much of the outgoing RBI governor’s work will continue but more safeguards are needed
PBoC governor sets out challenges of pursuing multiple objectives
Zhou Xiaochuan discusses how the People’s Bank of China expresses its multiple objectives as a function that can be optimised, while noting challenges posed to modelling and communications
National Reserve Bank of Tonga considering short-term policy rate, IMF says
Fund staff encourage Tonga to reform its monetary policy framework; suggest introducing new policy rate and inflation target range more appropriate to historic and current levels
Jamaican authorities send mixed messages on adoption of inflation targeting
IMF tells central bank to focus on single mandate but Jamaican authorities say more time is needed to investigate whether path is suitable
IMF paper explores transmission of volatility along yield curve
Working paper finds differences in transmission between countries with established inflation-targeting frameworks and those in transition
Kuroda says policy rules deserve further research
BoJ governor says work on policy rules and “incomplete contract theory” could help central bankers set policy more predictably
Sri Lanka targets new inflation framework under reform programme
Authorities will take steps towards inflation targeting over the coming years, while allowing greater exchange rate flexibility; IMF agrees to support reform programme
Prospective eurozone members fail to meet convergence criteria, ECB says
Seven prospective member countries show greater convergence in their economic indicators but fail to meet requirements for their legal frameworks, ECB report says
IMF staff urge oil-reliant countries to strengthen liquidity frameworks
Low oil prices likely to harm liquidity, raising the need for improved facilities and forecasting; risk of delayed surge in non-performing loans
Kocherlakota: Fed should talk openly about negative rates
Former Minneapolis Fed president says central bank should talk about its policy options in a recession ahead of time, to avoid sending a bad signal if they have to be used
Strong anti-inflationary monetary policy helps mitigate uncertainty shocks, Italian paper says
Central bank has better chance of mitigating uncertainty-driven recessions by following Taylor rule with high weight on inflation, paper finds
Iceland expands policy framework with capital flow tool
Central bank embraces idea of monetary policy dilemma, not trilemma, imposing reserve requirements on certain types of capital flows into the economy
Central Bank of Argentina raises reserve requirements
Argentina raises reserve requirements as it continues to fight high inflation; bank will introduce inflation-targeting regime in September
Pursuing stable rates may create instability, Norges Bank paper finds
Preference among central bankers to keep rates at “normal” levels may prove time-inconsistent, researchers warn
Bank of Jamaica lowers inflation target
Jamaica's central bank continues move towards inflation-targeting regime; bank forecasts inflation to fall within new target band by the end of the fiscal year
Iceland prepares for offshore króna auction
Date set for major step towards lifting capital controls, as holders of offshore króna are offered chance to swap currency, albeit at punitive rates
Lagarde: Kazakhstan central bank needs clear mandate
Floating the currency was "just the beginning", IMF chief says; urges update of monetary and fiscal policy frameworks
Riksbank’s Skingsley sees potential in helicopter money
Small, open economies will have limited room for manoeuvre if global real rates stay low, so central bankers should be willing to consider more radical options, deputy says
IMF staff encourage central Asian economies to overcome ‘fear of floating’
Even in economies with supposedly free-floating currencies, central banks have a hard time resisting the urge to intervene, IMF report says
Bank of Canada review explores inflation target renewal
Four articles consider various elements of the central bank’s inflation targeting framework; one charts growing influence of nominal wage rigidity on average wage growth
Philippines announces new rate corridor
Central bank will introduce new lending and deposit facilities in June, with interest rates set either side of a lower policy rate