Monetary Policy
Riksbank cuts rates in face of slowdown
Executive board votes to cut benchmark interest rate by 25 basis points to 1% and revise down forward guidance on rates; some members say actions should have gone further
Pakistani minutes show weak economy but low inflation
State Bank of Pakistan minutes show low level of private-sector credit and declining foreign investment behind stagnant economy; inflation lower than expected
CB.com poll reveals concerns over inflationary impact of QE
Majority of participants believe extraordinary monetary policy measures will cause central banks to overshoot inflation targets
BoE’s Weale urges use of more nuanced economic models
Basing models on a single representative agent risks obscuring important results, says Bank of England’s Martin Weale; alternative is greater emphasis on behavioural economics
Central Bank of Curaçao and Sint Maarten could split
The two Caribbean islands are contemplating dividing their shared central bank; Sint Maarten minister of finance keen to avoid new currency
Philippines’ inflation target will drop in 2015
Goal will decrease from 4% to 3% in line with the government’s desire for ‘disinflation’ and higher economic growth
The Bretton Woods transcripts
Bretton Woods was one of the world’s most important financial conferences, but one that was little known about until now
Book notes: Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics
At first glance the cover of this book implies that the overweening attachment of Thatcher and Reagan to free market economics lay at the root of the 2007–08 crisis. But it is not as simple as that
SNB will not abandon minimum exchange rate, Jordan says
Thomas Jordan reaffirms the Swiss National Bank’s commitment to a minimum of 1.2 Swiss francs to the euro; inflation expected to remain negative next year
Fed to extend QE by $45bn per month
Federal Reserve gives equity markets a lift by unveiling an additional $45 billion of quantitative easing; adopts numerical thresholds
RBA’s Stevens addresses growing importance of policy spillovers
Australia’s Glenn Stevens says policy-makers are becoming increasingly aware of the need to consider the wider impact of domestic decisions, although discussion is in its infancy
Finland paper sizes up Chinese reforms
Research published by the Bank of Finland examines financial liberalisation in China and what it means for the country’s monetary policy framework
Carney and BoE chief economist clash on inflation targeting
Bank of England governor-elect Mark Carney suggests inflation target could be sacrificed for nominal GDP goal; Spencer Dale questions whether this would be effective or viable
QE ‘relief’ no substitute for deleveraging, says HKMA’s Chan
HKMA chief executive warns asset price growth must be supported by structural developments
Belize paper evaluates value of currency peg
Research published by the Central Bank of Belize highlights export growth and steady domestic inflation aided by peg to the US dollar
Central Bank of West African States boosts growth estimates
Monetary policy committee praises member states’ investment in agriculture and infrastructure; holds benchmark interest rate
Central bank policies fuel asset price rise, says BIS
BIS quarterly review says monetary easing is helping to push investors into riskier assets despite a weakening global outlook.
Noyer trumpets Eurosystem response to crisis
Banque de France governor Christian Noyer believes the monetary policy adopted in the Eurosystem is a source of ‘immediate confidence and stability’
ECB lowers growth and inflation forecasts
ECB and BoE hold benchmark interest rates; Mario Draghi warns economic weakness will continue into next year, while inflation is likely to fall below its 2% target
Ingves defends position on rate-setting
Sveriges Riksbank governor insists in the absence of other instruments monetary policy should deal with potential risks of household indebtedness
BoJ’s Nishimura sees potential for $180 billion funding for lending
Under Bank of Japan’s ‘stimulating bank lending facility’, banks could receive up to 15 trillion yen ($180 billion) in low-cost funding, says deputy governor
RBA cuts rates to three-year low
Reserve Bank of Australia lowers rates despite growth near to trend and inflation likely to overshoot target in short run; dollar strengthens against greenback
Malawi minutes explain rate rise
Interest rate increased by 400 basis points as inflation hits 30.6% and the Malawian currency depreciates ‘faster than expected’
Bank of Uganda annual report emphasises adaptation to tough times
Annual report for 2011/12 suggests move to ‘inflation targeting lite’ framework helped bring a spike in inflation under control