Monetary Policy
Turkey intervenes in FX markets as lira slide continues
Central bank caught between shrill government rhetoric and jumpy markets, cutting FX deposit rates and launching liquidity operations in an attempt to halt the sliding lira
Carney: some shocks might warrant lower inflation target
BoE governor says persistent supply shock could justify a change in the inflation target, but stresses this is a ‘pure hypothetical’; optimistic over long-term picture for productivity
Colombian paper analyses impact of bank size and risk on policy transmission
Commercial banks with less credit risk on their books can ‘maintain a relatively good growth in the supply of credit’ when faced with a monetary policy shock, research finds
IMF sees deflation threat to Western Balkan recovery
Special report on economic transition in Western Balkans identifies deflation spilling over from eurozone as risk to recovery in the region; most of the countries experiencing negative inflation
Colombian paper finds structure matters in modelling oil shocks
Working paper finds evidence that the impact of an oil price shock on an oil-exporting country such as Colombia can be large, but depends on the structure of the economy
RBA research sets out stress test for households
Model emphasises dangers of relying on aggregate measures of household indebtedness when assessing financial stability and setting monetary policy
Poland publishes forecasts behind ‘final’ rate cut
Economics Institute within central bank lowers forecast for inflation in 2015 to -0.5%, down from 1% in November; MPC says last week’s cut ‘concludes’ its easing cycle
Ingves lays out toolbox at Riksbank’s disposal
Swedish central bank governor says he ‘will do more if necessary’ to fight deflation, arguing ‘there are several ways to make monetary policy more expansionary’
Central Bank of Honduras revises inflation target to 5.5%
After signing an economic agreement with the IMF last year, and in consideration of lower oil prices, the Central Bank of Honduras has adjusted its inflation target for 2015 by 50 basis points
RBA’s Lowe sees altered transmission mechanism behind low inflation
Inflation remaining stubbornly low despite record levels of monetary stimulus seems to be down to changes in the monetary transmission mechanism, deputy governor says
ECB reveals flexibility in QE programme
European Central Bank releases modalities of asset purchase programme; Draghi delivers upbeat press conference underpinned by positive staff projections
Ongoing reports of recovery add little to FOMC debate
Latest Beige Book shows economic activity expanding at a steady pace, while Esther George and Charles Evans take different sides in the FOMC’s inflation debate
BoJ’s Miyao extols virtues of open-ended QE
Outgoing policy board member says open-ended QE tends to have stronger effects than limited versions and may have additional impact via forward guidance and fiscal channels
RBI delivers second rate cut with inflation racing to target
The Reserve Bank of India surprised markets once again with an unscheduled rate cut of its key rate; analysts say this reduction shows trust in the government to maintain fiscal discipline
Fed officials debate research on equilibrium real rates
Research presented at US Monetary Policy Forum says uncertainty around equilibrium rate means the Fed should delay tightening policy; Loretta Mester and William Dudley discuss findings
Key rate hiked to 30% in Ukraine to stop currency slump
Ukraine’s central bank hikes interest rate to its highest level in 15 years, as part of a set of measures to combat the slump in the currency and battle inflation
Plosser and Conti-Brown debate Fed governance reforms
Peter Conti-Brown proposes giving the Fed’s board of governors the power to appoint and remove Reserve Bank presidents; Charles Plosser rejects arguments in his response
RBI gets formal inflation target
Reserve Bank of India tasked with getting inflation below 6% by January and handed a 4% target to chase from then; governor retains sole responsibility for setting monetary policy
Richmond Fed article questions use of dove and hawk to describe policy-makers
Article in Richmond Fed’s economic magazine argues the terms simplify the disagreements on the FOMC; says the idea of a split between two camps is ‘likely to persist’
PBoC steps up easing with another rate cut
China’s central bank cuts interest rates for the second time in less than four months, in a sign it is becoming more aggressive in combating economic weakness
BoJ’s Nakaso: More to be done to anchor expectations
Deputy governor points to ‘green shoots’ with regard to inflation and wage expectations but warns more work must be done to anchor them at the 2% target
Capital markets union must be carefully focused, say BoE researchers
Paper puts forward framework for analysing the myriad proposals under the umbrella of ‘capital markets union’, and argues they should be more targeted
Kuroda says oil shock has not thrown recovery off track
Inflation was nearing the target before being knocked down by the oil price collapse, BoJ governor says, insisting Japan’s ‘deflationary mind-set’ is still steadily fading
Kazakh central bank expects to hit inflation target if oil averages $50 or $60
National Bank of Kazakhstan publishes two forecasts with different assumptions about oil price; plans to limit market volatility by expanding monetary instruments