Monetary Policy
Central Bank of Argentina makes third cut in three weeks
Central bank cuts rate on its 35-day Lebac bonds to 25.25%, with analysts expecting further cuts to come as the institution begins transition to new monetary policy instrument
Central Bank of Honduras legislation needs to be ‘fast tracked’, says IMF
Implementation of inflation targeting regime hinges on legislative change, IMF says in latest report; Honduran authorities to submit legislative reform on central bank mandate by March 2017
Demands on central banks have created critical juncture – El-Erian
Economist says burden placed on central banks has created economic and political instability across the globe, and something must soon give
ECB minutes show concern over strength of future inflation
Wages growing at historically low rates, ECB council members say
QE may be partly to blame for global market correlations – SNB’s Maechler
Andréa Maechler says quantitative easing may cause some bond and equity prices to move simultaneously, but there are likely other factors at play as well
Bank of Mexico hikes following Trump election shock
Peso hit hard by Donald Trump's election victory, with possible US fiscal expansion and Fed rate hike likely to draw more capital from emerging markets, central bank says
BoE’s Cunliffe: central banks not causing low natural rates
Quantitative easing has not caused rates to fall, but is rather responding to a low natural rate, deputy says; the fall in sterling could require deviation of the policy rate from the natural rate
St Louis Fed chief says election has not changed near-term outlook
Bullard hints at support for “single policy rate increase”; says changes to fiscal and regulatory regimes likely from 2017 and to immigration and trade policy in longer term
BoJ economists seek best escape route from liquidity traps
Some policies are more effective than others, but a combination can generate stronger effects, researchers find
Bank of Italy publishes unconventional monetary policy papers
Papers and presentations cover models and data on unconventional programmes
Paper examines relationship between monetary policy and bank funding crises
Current regulatory tools are not sufficient to contain bank runs, Canadian working paper suggests, underscoring the importance of policy measures such as reserve requirements
Emerging markets hit harder by US rate hikes than domestic policy – Bank of Korea paper
US rate hikes have a larger impact on growth and financial flows in emerging markets than changes in domestic policy, researchers find
Eurozone banks need to change business models – Constâncio
ECB vice-president points to Swedish banks’ profitability despite low and negative rates
US affected by spillovers as well as causing them – Fed’s Fischer
Foreign developments can be a “substantial headwind” to US monetary policy, vice-chair says; hints at continued momentum towards a December rate hike
IMF praises Argentinian central bank for proposed changes to monetary policy framework
IMF encouraged by Argentina’s progress but says more effort required to strengthen monetary policy framework, including granting central bank operational independence
RBNZ delivers rate cut as exchange rate strength persists
Board reaffirmed move in light of Trump victory, but cut has been in the offing for some time as NZ dollar strength holds down inflation
Ignazio Visco on Italian banks and why the ECB should not be made a ‘scapegoat’ for EMU fatigue
The Bank of Italy governor speaks to Chris Jeffery about resolving Italy’s NPLs, Europe’s bail-in framework, the importance of QE and why the ECB needs to stop being made a ‘scapegoat’ for EMU fatigue
Central banks respond as markets roiled by Trump victory
Mexico hit by large capital outflows, while Swiss and Japanese central banks face large inflows; Federal Reserve likely to come under pressure
Constâncio rejects higher inflation targets and instrument rules
Higher targets would not re-anchor inflation expectations, ECB vice-president says
Mozambique governor hikes rates by 600bp as inflation hits record high
IMF spokesman says talks continuing over audit of government finances as newly appointed governor makes fifth and biggest rate rise of 2016
Argument for raising rates has ‘strengthened’, says FOMC
Federal Reserve to keep rates on hold “for the time being”; Rosengren switches camp again despite warning that keeping rates on hold could be detrimental to recovery
Central Bank of Egypt devalues currency
Egyptian pound falls 32% as central bank moves to align official and black market rates; IMF mission chief welcomes additional exchange rate flexibility
Bank of England MPC backtracks on planned rate cut
Latest inflation report forecasts larger overshoot of 2% target; there are “limits” to the extent to which above-target inflation can be tolerated, committee says
Netherlands paper looks at market reaction to Fed forecasts
Implied forecasts of inflation affect market expectations, paper finds