Exchange rate
BIS paper offers improved real exchange rate calculation
Authors find models used to calculate real effective exchange rate do not properly account for global value chains
Zimbabwe central bank actions like ‘putting lipstick on a frog’
Economic crisis is reminiscent of meltdown preceding dollarisation in 2008, but authorities have fewer options this time
Worst could be yet to come, warns Sarb
Further credit downgrades could result in further outflows of investment in South Africa, threatening the strength of the rand and overall financial stability; governor Kganyago says central bank will work to avoid more volatility
Forex volatility can boost liquidity – BIS paper
Price volatility might not always be a bad thing for market liquidity, authors find
Fresh exchange rate cap remains an option – CNB minutes
Minutes of extraordinary meeting say exchange rate commitment or other unconventional tools cannot be ruled out if deflation risks re-emerge
Research finds ways to tame FRTB’s biases in forex charges
New paper shows ways to reduce influence of reporting currency
Bank of Jamaica outlines plans to become ‘modern’ central bank
Initiatives to implement inflation-targeting framework and liberalise forex rate already under way; IMF says strengthening autonomy will help
China forex reserves inch higher in March
PBoC figures show increase of $3.96 billion, resulting in second consecutive monthly reading above $3 trillion
Lower rates link to higher exchange rate impact – BIS paper
Working paper finds monetary policy’s impact on the exchange rate has grown as rates have fallen
Sarb will take ‘defensive posture’ to debt downgrade, says Ballim
South Africa’s central bank is unlikely to respond to country’s junk debt status unless rand volatility starts to affect prices; Fitch joins S&P in downgrading country’s sovereign debt
Debelle sets timeframe for adoption of forex global code
Market participants will have six to 12 months to adjust practices once the code is published on May 25
Icelandic leaders clash on possible peg
Prime minister challenges finance minister’s assertion that the krona needs to be pegged; government launches review of exchange rate policy
Inflation worries prompt further action from Mexico
Mexico slows pace of rate hikes amid inflation worries and volatile exchange rate; monetary policy committee will closely watch US economy, latest announcement says
Exporters’ ‘sweet spot’ unlikely to be enjoyed for long, says BoE’s Broadbent
BoE deputy investigates cause of sterling’s Brexit depreciation, examining potential impact of market speculation
Denmark pays off all foreign debt for first time in 183 years
Government pays off its last foreign currency loan, leaving it free of foreign debt for the first time since at least 1834
Turkey keeps tightening with secondary instruments
Hike in late liquidity facility gives room for further tightening, as the central bank responds to inflation hitting double figures
BoE’s Jackson: need to intervene on market function still an open question
Head of forex and reserves management discusses evolving understanding of flash events, market structure, and whether there is a case for further intervention
Latin American central bank interventions 'mitigate' liquidity shocks
Central banks more concerned with global factors than structural changes to forex markets; post-crisis regulation and tech advancements proving problematic for market makers
Nigerian recovery plan envisages new exchange rate regime
Plan calls for rationalisation of exchange rate structure and echoes many of central bank governor’s criticisms of status quo
Central Bank of Uzbekistan issues new highest-denomination banknote
New 10,000 som denomination to feature similar security features to notes already in circulation; inflation has eroded value of existing notes
Ending speculation on the Czech forex cap: quo vadis, CNB?
David Vavra suggests a method the Czech National Bank could use to free itself from the mounting pressure on its exchange rate peg, avoiding a “Swiss-style” exit
Danish central bank conducts $670 million FX intervention
Danish central bank conducts largest intervention in FX market since June 2016; analysts say demand for krone will continue, but interest rate hike is unlikely
Plummeting inflation prompts Bank of Zambia action
Central bank cuts policy rate by 150bp, in addition to a cut to the overnight lending rate and reserve ratio; inflation falls from over 18% to 7% in a matter of months
Mexico steps in to stabilise forex market
New derivatives contracts will be available to all credit institutions, with the first auction scheduled for March 6; a total of up to $20 billion will be allocated, central bank says