Inflation
BoE’s King explains continuing high inflation
Mervyn King writes to chancellor of the exchequer explaining why inflation remains above target; despite 0.6% drop in rate since December, governor must offer reasons for missed target
BoE boosts QE by £50 billion
Bank of England increases the size of its Asset Purchase Programme to £325 billion as forecasts show inflation in the UK is likely to undershoot its target in the medium term
RBA surprises markets with rate hold
Reserve Bank of Australia policy board leaves cash rate unchanged despite market expectation of 25-basis point cut in rates due to weak external outlook
Inflation-targeting central banks should be dissuaded from dual mandate, says St Louis Fed paper
St Louis Federal Reserve study says how Federal Reserve should respond to aggregate supply shocks is unclear if it is to pursue inflation targeting under a dual mandate
Dominican Republic confident in new inflation target; holds rates
Central Bank of the Dominican Republic leaves rates unchanged at first meeting since introducing a new inflation targeting framework; says it will meet 5.5% inflation target by the end of 2012
Central Bank of Iceland paper highlights limitations of inflation indexed bonds
Central Bank of Iceland study shows inflation index-linked bonds in US, UK and Iceland are unreliable measures of the real interest rate
Central Bank of Turkey predicts inflation target overshoot until 2013
Central Bank of Turkey says inflation will not return to 5.5% target until mid-2013; officials want to prevent "unfavorable fluctuations" in economic activity by acting too soon
NY Fed paper sheds light on causal determinants of inflation expectations
Federal Reserve Bank of New York study says consumers may be revising their inflation expectations in response to inaccurate information
State Bank of Pakistan warns on ‘deteriorating’ budgetary conditions
State Bank of Pakistan quarterly report says government fell short of budget target last year; warns drying up of foreign direct investment could leave economy vulnerable
Core inflation is a poor forecaster of future price levels, says Brazilian research
Central Bank of Brazil study finds core inflation is a poor directional indicator for future headline inflation
Fed communication overhaul reveals split in rate forecasts
Federal Reserve survey of individual policy-makers’ interest rate expectations shows five-year split on when to make first federal funds rate rise; Fed falls short of inflation target
Bangladesh Bank calls on government to borrow less
Bangladesh central bank wants to bring inflation to single digits and halt foreign currency reserve “depletion”; hopes government borrowing will not “crowd out” available liquidity in banking system
King sees ‘no reason to despair’ over world economy
Governor of the Bank of England acknowledges ‘serious’ situation global economy is in, but says there is a way forward; despite fall in inflation the year ahead will not be easy, King says
Zambia raises capital ratio for banks and rebases currency
Bank of Zambia reveals government decision to hike capital requirements for banks operating in the country; three zeros also to be slashed from value of banknotes
ECB in talks with dealers on buying inflation-linked bonds
Dealers will present their case as to why the ECB should buy linkers as well as nominal bonds in a conference call today
Fed reveals design of new interest rate projections
Federal Reserve releases templates to be used in next Summary of Economic Projections (SEP) to project participants' views of the appropriate path for monetary policy
IMF paper on optimal monetary policy frameworks under price distortions
Fund study shows sectoral inflation targeting and output gap stabilisation outperform strict headline inflation targeting in the presence of subsidised prices for goods
Chile lowers rates for first time since 2009
Central Bank of Chile announces 25-basis-point cut to benchmark rate; stresses commitment to maintaining 3% inflation target
ECB and BoE join other countries in rates hold
European Central Bank and Bank of England join the National Bank of Poland and Bank Indonesia in leaving interest rates on hold; ECB president welcomes U-turn on Greece private sector involvement
IMF paper measures the natural rate of interest
Fund study says the transformed money demand and observed output gap provides the best information about the natural interest rate
Sri Lanka holds rates on stable growth outlook
Central Bank of Sri Lanka Monetary Policy Review shows economy grew by 8.4% in the third quarter of 2011 due to strong agriculture, industry and services sector
Albania approves monetary policy strategy for 2012-2014
Bank of Albania renews monetary policy strategy; offers clarifications and elaborations on previous versions of aims
Counter-cyclical capital buffers rely on good central bank policy: BoC paper
Bank of Canada study finds central bank policy can strongly influence success of counter-cyclical capital measures
NY Fed paper identifies illiquidity issues in Tips market
New York Federal Reserve study says benefits of inflation-protected Treasury securities are not being fully reaped