Monetary Policy
Draghi says ECB ready to make further bond purchases
ECB president says central bank is prepared to intervene in sovereign bond markets to prop up ailing eurozone economies; ECB holds rates, as does Bank of England
Bank of Mexico deputy governor concerned by rising core inflation
Manuel Sánchez highlights increased inflationary pressure in Mexican economy; remains positive about country’s economic growth prospects
Central Bank of Chile paper supports unit root-based inflation forecasts
Working paper argues unit root-based models can create effective inflation forecasts; tests findings based on data from US, Canada and Sweden
Cleveland Fed researchers find fault with BoE’s Funding for Lending
‘Economic Trends’ research from the Federal Reserve Bank of Cleveland identifies possible flaws in the Bank of England’s Funding for Lending Scheme; warns of risk to independence
UK Funding for Lending Scheme opens
Bank of England and UK Treasury’s Funding for Lending Scheme window opens to UK banks and building societies; institutions have 18 months to borrow cheaply under the arrangement
RBI paper investigates relationship between liquidity types
Researchers study a variety of liquidity indicators to determine the links between them; argue that although there is a relationship, this nevertheless may not be a suitable guide to policy
Thailand reports improved economic conditions
Senior director of macroeconomic and monetary policy department notes overall better conditions in second quarter of 2012; European debt crisis has caused problems for export market nonetheless
India holds rates as growth expectation falls
Reserve Bank of India releases First Quarter Review of Monetary Policy 2012–13; holds rates, lowers growth prediction and raises inflation projection
National Bank of Serbia paper finds strong domestic bank lending channel
Working paper identifies 'significant' impact of monetary policy on domestic currency loan growth through bank lending channel; says channel is weak for foreign currency loans
Sarb’s Marcus discusses developments in central bank communication
Gill Marcus says communication has become ‘fundamental’ to central bank strategy, but suggests there are limits to usefulness of transparency
IMF paper highlights risks of higher inflation targets
Researchers assess the effects of increasing inflation targets; argue this can help prevent problems of a zero lower bound, but the overall impact on welfare is negative
Laos central bank ignores IMF advice
IMF delegation again recommends increase of reserve requirements for banks; Bank of the Lao PDR says it will not make the change yet
RBI paper finds monetary policy undermined by unsustainable deficits
Researchers assess link between high government debt and persistent inflation; find restrictive monetary policy may struggle to contain inflation if accompanied by a large budget deficit
Bank of Canada paper finds major benefits of QE in UK and US
Researchers study impact of asset purchases by Federal Reserve and Bank of England; identify ‘powerful effect’ on output and inflation
St Louis Fed research stresses importance of money
Working paper argues that money is essential in determining prices, despite monetary aggregates being largely ignored by central banks; says central banks have limited power over interest rates
Malawian governor unapologetic for reform pain
Charles Chuka says ‘when you mess up you pay the price’ and vows to plough on with economic reforms; blames past overvalued exchange rate for country’s problems
Central banks hold rates amid continued uncertain outlook
Central banks in Hungary, Israel, Mexico, Nigeria and Thailand maintain benchmark interest rates, citing fragile global economy; domestic growth prospects vary
ECB lambasts Hungarian financial transaction tax
European Central Bank accuses government of hindering National Bank of Hungary's independence by imposing transaction tax; also blasts failure to properly consult on the plans
Curacao and Sint Maarten governor discusses central bank co-operation
Emsley Tromp says co-ordinated action by central banks is particularly important in emerging markets; outlines four areas where closer ties would be beneficial
BoJ deputy governor says central bank ready to act
Hirohide Yamaguchi suggests possibility of further monetary easing if global economic outlook worsens; nevertheless gives positive assessment of economic conditions
Tunisian government under fire for sacking central bank governor
Rating agency declares decision to remove Mustapha Kamel Nabli from post ‘credit negative’; loss of well-respected central bank chief threatens institution’s independence, says Moody’s
Sarb annual report notes ‘pedestrian’ growth days after rate cut
Annual economic report shows South African output ‘losing some momentum’ in 2012; follows 50bp rate cut by central bank
BoE paper studies information in sticky and flexible prices
Working paper studies the usefulness of sticky and flexible prices in showing firms’ estimates of the output gap and inflation expectations
Central bankers discuss cooperation in times of crisis
Fed’s Duke and ECB’s Cœuré offer thoughts on pros and cons of central banks working together during periods of economic turmoil; both take the chance to defend their institution’s actions