Exchange rate
Pakistani government picks new governor after SBP spat
Tariq Bajwa takes over from acting governor Riaz Riazuddin; appointment of finance ministry official follows clash over exchange rate movements
SBP clashes with government on exchange rate drop
Pakistan’s finance minister expresses “deep concern” over sudden drop in currency, but central bank says it is now “broadly aligned” with fundamentals
Pass-through varies across countries and time – BoE paper
Kristin Forbes and co-authors study the shocks and structural factors that help explain variations in the exchange rate’s impact on inflation
Malaysian government escalates investigation on historic forex losses
Commission will investigate heavy forex losses by the Malaysian central bank in the early 1990s, after task force finds evidence information was concealed
Indonesian deputy Perry on revolutionising monetary and financial policy
Perry Warjiyo explains the central bank’s radical overhaul of monetary policy operations, market deepening and financial inclusion in Indonesia
BoE economists criticise DSGE inflation modelling
Team including MPC member Kristin Forbes criticises structural modelling approaches for failing to properly account for trend inflation
Overvalued Swiss currency is keeping rates low – SNB’s Jordan
The Swiss franc remains “significantly overvalued”, despite low interest rates and forex interventions; expansionary monetary policy makes the franc “less attractive” for investors
Qatari peg under pressure despite reassurances
Riyal drops below official level of the peg amid concerns over Qatar’s diplomatic isolation; central bank governor highlights deep pool of reserves
Term premiums matter for inflation – BoJ paper
Term premiums domestically and abroad appear to affect inflation via the exchange rate channel, authors find
UK election roundup: all eyes on Brexit negotiations
Economists react as UK vote delivers a hung parliament, casting doubt on the way forward with Brexit negotiations and causing a drop in the pound
‘Relentless pressure’ on Barbadian central bank harms growth
Former central bank governor says government should get help from IMF ‘without delay’; fund assistance is proven to help and would result in long-term gains, says Worrell
Venezuela’s central bank devalues bolivar as crisis continues
Bolivar devalued 64% in latest currency auction in an attempt to stem effects of financial crisis; Goldman Sachs comes under fire from opposition leader
Surprise RMB strengthening prompts unwinds
"A lot of long [US$] positions were unsustainable and had to be re-evaluated," says forex structuring head
Flexible exchange rate aids those hit by commodity shock, IMF report says
“Sacrifice ratio” is lower for those that allow local currency to depreciate; fixed exchange rates are becoming more expensive, IMF says
MAS concludes 1MDB review with fresh fines
Credit Suisse and UOB fined $1.6 million collectively, with further individuals receiving lifetime bans
Bank Negara governor defends efforts to curb NDF market
Malaysian central bank will continue its actions to improve market mechanism to facilitate an open and robust onshore financial system
Central banks stress commitment as FX Global Code launches
Central banks worldwide are quick to state they will comply with the new global forex code and expect their counterparties to do the same
Debelle: central banks can benefit from lack of covered interest parity
Increase in the “basis” or deviation from CIP is not always a sign of trouble and can offer reserve managers increased returns, RBA deputy says
Central Bank of Egypt battles to contain devaluation impact
Inflation has rocketed since Egypt aligned official and black market exchange rates, forcing the central bank to take action
Sterling depreciation will increase pace of tightening, BoE says
Inflation will overshoot target for longer period, reveals latest Inflation Report, but raising rates will not help, BoE says; “extraordinary circumstances” call for delicate balancing act
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