Capital controls
PBoC acts to rein in renminbi depreciation
Reserve requirement makes it more expensive to short-sell yuan, the first effort by the central bank to stem the currency’s three-month slide
Book notes: China’s Great Wall of Debt, by Dinny McMahon
McMahon is too pessimistic about the chances of China managing to get its great wall of debt under control, writes Michael Taylor, but he is undoubtedly right about the scale of the challenge
Argentina launches new measures to stem peso depreciation
Analysts concerned new central bank tools to control peso are not enough
BIS paper studies evolving renminbi exchange rates
It is “premature” to declare a stable zone for the renminbi, the paper concludes
Argentina’s central bank makes further emergency rate hike as currency falls
Bank makes second emergency rate hike in less than 24 hours
Argentina’s governor reflects on reserve management rebuild
After liberalising the exchange rate in 2016, the country adopted new asset-allocation strategies
Iceland is ready to drop final capital controls – Guðmundsson
Icelandic governor says economy is sturdy enough to allow the removal of the remaining controls
BoE’s Cunliffe sees liquidity risk in rise of investment funds
Investors have poured money into less liquid instruments at a time when market liquidity has been falling, warns the BoE deputy governor
Fijian authorities say there are no plans to lift capital controls
IMF warns not removing controls could harm foreign investment; central bank says it will review controls with respect to the level of foreign reserves
Education key to forex liberalisation success, says Bahamas governor
Private sector needs to base forex decisions on returns rather than “fear the erosion of wealth”, says Rolle
Venezuela’s new forex auction sees bolivar plummet
Latest auction sees currency devaluate by 99% from heavily subsidised exchange rate
Thailand eases foreign exchange rules to encourage outflows
Central bank seeks to cool down the baht, one of the fastest-appreciating Asian currencies
Renminbi struggles to gain prominence on global stage – Swift
Chinese currency usage only accounted for 1.61% of domestic and cross-border payments in December 2017; digitisation may be the key to currency’s success
Lifetime achievement award: Perng Fai-nan
Pre-emptive financial reforms combined with flexible monetary and forex policies have enabled Taiwan’s veteran governor to provide economic stability, even during turbulent times
Angola drops dollar for euro in new exchange rate regime
Kwanza depreciates 11.5% against the dollar following regime change
Book notes: The Right Balance for Banks, by William Cline
An interesting analysis of optimal capital requirements for G-Sibs, examining whether Basel III requirements will be enough to stem another financial crisis
Bank of Canada paper studies capital control motivations
Researcher designs policy rule to study whether capital controls are imposed with “mercantilist” or “macro-prudential” motivations
EMs should work to avoid ‘macro-prudential war’ – BIS article
Use of macro-prudential policies should be co-ordinated internationally for maximum effect, say Luiz Pereira da Silva and Michael Chui
Fed paper calls for rethink of conditions for setting capital controls
Policymakers should also consider how external shocks affect the borrowing capacity of the country, researchers say
Evolution of monetary policy in advanced economies spells trouble for emerging markets – paper
Research explores the impact future monetary policy will have on emerging markets, concluding many will be forced to implement defensive measures
BNM governor warns global bodies against ‘one-pill-cures-all’ mindset
Wealth of information from multilateral institutions has aided decision-making, but narrow definition of the ‘right’ policies could lead to worse outcomes, Muhammad Ibrahim says
Paper explores effects of capital controls on cost of international debt
Restrictions on capital inflows produce “substantial” corporate bond spreads but effects are mitigated for firms in EU or with English legal origins
Illicit capital flows a problem for countries without capital controls – Mminele
Mminele explains how capital controls benefited cross-border flow monitoring; Sarb deputy calls for a “more consistent” approach to capital flow management
Chile’s Marcel praises Argentine reforms
IMFC chairman says reforms have “paid off”, helping the country re-enter the global economic stage; lifting of capital controls and export restrictions will contribute to Argentina’s growth in 2017