Monetary Policy
Bank of Ghana starts to unwind tight monetary policy
Central bank slashes interest rates to 23.5% in largest cut since 2010; inflation shows signs of improvement but certain risks still loom over prices
Bank of Russia cuts policy rate
Elvira Nabiullina says Russia on course to hit 4% inflation target by year end
Extended monetary easing in US has larger impact abroad – paper
IMF paper examines the impact of periods of prolonged monetary easing on risk-taking behaviour; leverage ratio and other measures of vulnerability increase
BoJ minutes highlight hopeful signs for Japanese economy
Members highlight “more solid” recovery supported by a pick-up in exports and production, although inflation is still sluggish
Time to shrink Fed’s $4.5 trillion balance sheet, say presidents
Cleveland Fed president is “comfortable” changing reinvestment programme this year; balance sheet plan should be published as soon as possible, says Kashkari
French paper examines impact of ECB’s PSPP on bond yields
Researchers use data from the French market to examine bond shocks
HK researchers ask how much markets affect RMB fixing
Researchers test China’s assertion the exchange rate is now determined more by markets, finding mixed evidence
Kashkari explains his sole FOMC dissent
Minneapolis chief reminds his colleagues the Fed treats 2% inflation as a target, not a ceiling; urges FOMC to publish plan for shrinking balance sheet
Turkey keeps tightening with secondary instruments
Hike in late liquidity facility gives room for further tightening, as the central bank responds to inflation hitting double figures
BoE’s Forbes dissents as inflation looms
MPC member votes for 25bp hike as inflation looks set to exceed target until “at least” 2020; other members sitting on the fence, for now
Fed delivers 25bp hike
Fed makes rate hike that many FOMC members have been hinting at for weeks; committee gives bullish signals on the outlook
Daily open market operations paying off – National Bank of Denmark
Introduction of daily open market operations has smoothed liquidity management, stabilising the money market reference rate
IMF research uncovers ‘puzzling’ effect of QE on the current account
Authors see QE having significant impact only when capital mobility is low; findings suggest “unexplained variation” between QE and capital mobility
‘Substantial’ accommodation must continue – Draghi
ECB president says underlying eurozone inflation remains “subdued”, despite rise in headline rate; he sounds the alarm over the possibility of a “competitive devaluation” by advanced economies
Tanzanian central bank slashes discount rate
Central bank cuts discount rate for the first time since 2013, from 16% to 12%; increase in NPLs has discouraged commercial banks from lending
Ending speculation on the Czech forex cap: quo vadis, CNB?
David Vavra suggests a method the Czech National Bank could use to free itself from the mounting pressure on its exchange rate peg, avoiding a “Swiss-style” exit
ECB announcements in QE era shifted inflation expectations, Austrian paper finds
Researchers use daily data on bond yields and inflation-linked swaps
Federal Reserve publishes its first fan chart
Fed unveils new communication method as Janet Yellen makes clearest statement yet that a March hike is on the table
Politics now driving markets more than central banks – BIS review
“Precipitous decline” in correlations implies markets no longer in thrall to central bank policy; US dollar credit still on the rise despite MMF reform; tensions in Chinese markets
Finnish paper analyses Chinese central bank’s ‘window guidance’
PBoC may have to move away from using lending quotas, researchers argue
CBRT under pressure as inflation breaches 10%
Consumer prices rising at their fastest rate since 2012, leaving the central bank in a difficult position
Pace of Brazil's monetary easing could increase, minutes show
Copom says evolution of economic performance and the level of the structural interest rate will dictate pace of easing cycle; fiscal policy could reduce structural interest rate
Iran needs to overhaul monetary operating framework – IMF
Absence of policy rate and emergency lending facilities is creating instability, fund warns; central bank council “dominated” by representatives from other government agencies
RBNZ’s Wheeler: policy now has ‘neutral bias’
Risks to future rate movements “equally weighted”, governor says, though plenty of domestic and global risks could knock the outlook off course