Inflation targeting
Adopting inflation target can create higher inflation – paper
Bank of Korea working paper finds positive relationship between inflation target and inflation, implying some central banks may be tempted to move the goalposts
Inflation to reach 2% target in next six months, BoE says
MPC votes unanimously to leave rates unchanged at 0.25%; exchange rate appreciation suggests smaller overshoot of inflation target than previously forecast
Riksbank’s Jansson rejects calls to scrap inflation target
Critics likely underestimate the benefits of the current monetary policy framework when calling for it to change, deputy governor says
Serbia is ready for lower inflation target – Tabaković
Monetary policy and fiscal discipline has allowed Serbia to “join the ranks” of low-inflation countries; projections for growth revised up
Central Bank of Honduras legislation needs to be ‘fast tracked’, says IMF
Implementation of inflation targeting regime hinges on legislative change, IMF says in latest report; Honduran authorities to submit legislative reform on central bank mandate by March 2017
BoJ paper designs new measure of trend inflation
Author’s measure reflects the weighted average of an adaptive component and a forward-looking component
Canada opts to retain 2% inflation target
Bank of Canada will continue with current target in new five-year deal with government, though other aspects of the policy framework are changing
What else can central banks do?
Geneva Report’s plea for central banks to use more negative rates, additional QE and helicopter drops appears misguided
Benefits to inflation overshooting target – Chicago Fed president
Policy-makers “willing to accept” inflationary risk that comes with falling unemployment if Fed overshoots target, Evans says
Bank of Canada should not raise inflation target – Obstfeld and co-authors
Central bank has been overtaken in transparency metrics, authors say; forward guidance would catapult Canada to top of rankings and could avoid the need for unconventional measures
Mexico inflation could be affected by exchange rate and US events
Mexico’s board to closely monitor exchange rate pass-through on consumer prices, quarterly review says; outcome of US election and the normalisation of the Fed's interest rate also a concern
Riksbank highlights complexity in choice of target
Report studies case for changing target to CPIF or HICP inflation, and reinstating target band, ahead of discussions over monetary framework reforms
Skingsley calls for balance, as government prepares to rethink Riksbank Act
Central bank mandates need to be a balance of specificity and flexibility, while too broad a mandate could threaten independence, deputy says; government to consider six areas of Riksbank’s work
Rates likely to stay on hold, says Chilean monetary policy report
Inflation expected to be in the target range by year-end, latest monetary policy report forecasts show; no need for new hikes if economic trends continue
RBNZ’s Wheeler stands by inflation targeting
Despite a host of challenges for central banks, flexible inflation targeting remains the “most appropriate” framework for New Zealand’s monetary policy, governor says
Urjit Patel to take over from Rajan at RBI
Deputy governor led work on India’s new inflation-targeting framework; appointment seen as signal of government’s commitment to current policy
Chinese authorities should introduce inflation target – IMF staff
Report by IMF staff sets out ‘key elements’ of transition to more market-based monetary framework; encourages explicit inflation goal and new intermediate target for policy
Reserve Bank of Australia governor backs 2–3% target in final address
Reserve Bank of Australia governor supports inflation-targeting regime in last public address; moving the target could open the door to further changes down the line, warns Stevens
Annual inflation in Argentina at 40.3% by year-end, markets say
Inflation seen slowing to less than 16% by end of 2018; results published in new expectations survey, relaunched after the central bank studied examples from abroad
Central bank should consider sticky-price inflation as target variable – paper
South African working paper argues central bank should consider sticky price inflation as target variable; sticky prices more persistent and less volatile
Reserve Bank of Malawi to improve monetary policy architecture
Bank moves towards fully fledged inflation targeting, embracing interest rate-based framework; IMF staff note importance of maintaining tight monetary policy
Rajan has left his mark but risk of fiscal dominance remains
Vishrut Kansal examines the legal framework Raghuram Rajan’s successor will face, arguing much of the outgoing RBI governor’s work will continue but more safeguards are needed
Jamaican authorities send mixed messages on adoption of inflation targeting
IMF tells central bank to focus on single mandate but Jamaican authorities say more time is needed to investigate whether path is suitable
Sri Lanka targets new inflation framework under reform programme
Authorities will take steps towards inflation targeting over the coming years, while allowing greater exchange rate flexibility; IMF agrees to support reform programme