Monetary Policy
Yen weakness brings relief for Bank of Japan
Policy on hold, but central bank sees brighter outlook for 2017; yen close to lowest level this year, following Trump shock
Adopting inflation target can create higher inflation – paper
Bank of Korea working paper finds positive relationship between inflation target and inflation, implying some central banks may be tempted to move the goalposts
Czech Republic closer to euro adoption but still not ready – CNB
Economy is converging with Europe but costly accession to single supervisory mechanism means country is not ready to begin formal process, CNB says
SNB’s Jordan stresses commitment to exchange rate intervention
Central bank holds the policy rate, but the Swiss franc is still “significantly overvalued”, and the SNB will continue to intervene, chairman says
Inflation to reach 2% target in next six months, BoE says
MPC votes unanimously to leave rates unchanged at 0.25%; exchange rate appreciation suggests smaller overshoot of inflation target than previously forecast
FOMC signals hawkish outlook as it hikes
Dot plot shifts upward and projection implies members expect further hikes in 2017; Janet Yellen says fiscal stimulus “not obviously needed”
BIS: markets less beholden to central bank action
Political shocks appear to have jolted markets into a more healthy state, but it is not yet clear if this is the start of normalisation or a temporary phase
UK inflation expectations leap in fourth quarter
Brexit shock appears to have driven increase in inflation expectations; satisfaction with Bank of England remains high, but looks likely to fall as inflation rises
Riksbank’s Jansson rejects calls to scrap inflation target
Critics likely underestimate the benefits of the current monetary policy framework when calling for it to change, deputy governor says
ECB will stay in asset markets - Draghi
Asset purchases will continue, but at a lower monthly rate; ECB to accept cash as collateral in securities lending programme
Central Bank of Brazil says ‘intensification’ in pace of monetary easing might be warranted
Some members of the committee said there could be room for a larger rate cut, minutes show; slowdown in inflation and implementation of government fiscal policies prompted 25bp cut
Patel defends approach to banknote crisis, as RBI holds
Governor offers some clarity on progress with note withdrawals and question of “extinguishing” parts of balance sheet; rate hold surprises market
St Louis Fed president may support rate increase
Bullard cautions future real interest rates likely to stay flat; says Trump administration can only alter low interest rate environment by improving productivity
Dombret paints gloomy picture of low rates’ impact on banks
Bundesbank board member spells out risks associated with low interest rate environment, noting banks are more likely to take risky assets onto their books the longer it prevails
Carney hits back at critics of monetary policy’s distributional impact
Monetary easing has disproportionately benefited the poor, BoE governor says; loss of open markets “would be a tragedy, but is a possibility”
Brazil cuts interest rates amid US economic uncertainty
Uncertainty around the rate of disinflation prompts committee to reduce rates with caution; pace of disinflation may “intensify”, says Copom, dependent on strength of economic recovery
Rate pass-through 'weaker and slower' in Mongolia – paper
Reforms at the Bank of Mongolia have improved the transmission mechanism, authors say, but there is plenty more work to do
Impact of interest rate cap still unclear – Kenyan governor
There is not enough data on interest caps to influence the MPC’s decision, says Njoroge; interest rates remain on hold at 10%
Nigerian MPC calls for state to act on stagflation crisis
Committee members warn the central bank on its supervision of banking sector; say monetary policy has a limited effect in face of the current problems
Malawi cuts interest rates on the back of lower inflation
Central bank cuts interest rates by three percentage points to contain inflation, though it also hopes to protect reserves
Kganyago says low point for growth has ‘passed’
The Sarb governor says inflation is “uncomfortably close” to the upper end of the target range; the monetary policy committee unanimously votes to keep rates on hold
Gulf central banks should act to boost liquidity – IMF report
Improved liquidity assistance frameworks, better forecasting and deeper Islamic liquidity markets would help ease conditions
Turkish central bank hikes as Trump election hits lira
Turkish lira has been targeted in emerging market currency sell-off; rate hike ignores the latest call for more cuts from Turkish president
Serbia is ready for lower inflation target – Tabaković
Monetary policy and fiscal discipline has allowed Serbia to “join the ranks” of low-inflation countries; projections for growth revised up