Exchange rate
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
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