Interest rates
Dombret paints gloomy picture of low rates’ impact on banks
Bundesbank board member spells out risks associated with low interest rate environment, noting banks are more likely to take risky assets onto their books the longer it prevails
EU could impose negative rate shocks via IRRBB rules
EBA guidance on shocks is “outdated”, says ECB official
Brazil cuts interest rates amid US economic uncertainty
Uncertainty around the rate of disinflation prompts committee to reduce rates with caution; pace of disinflation may “intensify”, says Copom, dependent on strength of economic recovery
Rate pass-through 'weaker and slower' in Mongolia – paper
Reforms at the Bank of Mongolia have improved the transmission mechanism, authors say, but there is plenty more work to do
Central banks may be partly to blame for low real rates, says BIS’s Borio
Ever-bolder attempts to raise inflation could push down on real rates, generating little inflation but worsening the risk of instability, Claudio Borio says
Impact of interest rate cap still unclear – Kenyan governor
There is not enough data on interest caps to influence the MPC’s decision, says Njoroge; interest rates remain on hold at 10%
Stiglitz urges central banks to focus on credit, not interest rates
Emphasis on interest rates ignores more important question of whether credit is getting where it is needed, Nobel economist argues
Central Bank of Argentina makes third cut in three weeks
Central bank cuts rate on its 35-day Lebac bonds to 25.25%, with analysts expecting further cuts to come as the institution begins transition to new monetary policy instrument
Colombian paper models non-linearity in sovereign risk
Model of real exchange rates seeks to capture the non-linear effects of sovereign risk for Latin American countries
Bank of Mexico hikes following Trump election shock
Peso hit hard by Donald Trump's election victory, with possible US fiscal expansion and Fed rate hike likely to draw more capital from emerging markets, central bank says
BoE’s Cunliffe: central banks not causing low natural rates
Quantitative easing has not caused rates to fall, but is rather responding to a low natural rate, deputy says; the fall in sterling could require deviation of the policy rate from the natural rate
Carney faces grilling from parliament in wake of tenure decision
Regardless of Brexit timetable, BoE governor will leave on June 30, 2019; he warns firms could trigger plans to leave London in late 2017 if Brexit deal proves unsatisfactory
US affected by spillovers as well as causing them – Fed’s Fischer
Foreign developments can be a “substantial headwind” to US monetary policy, vice-chair says; hints at continued momentum towards a December rate hike
RBNZ delivers rate cut as exchange rate strength persists
Board reaffirmed move in light of Trump victory, but cut has been in the offing for some time as NZ dollar strength holds down inflation
Is the Central Bank of Argentina back?
The Central Bank of Argentina’s new governor, Federico Sturzenegger, has made strong progress in tackling runaway inflation and reversing the country’s monetary decline. But many challenges remain
Argument for raising rates has ‘strengthened’, says FOMC
Federal Reserve to keep rates on hold “for the time being”; Rosengren switches camp again despite warning that keeping rates on hold could be detrimental to recovery
Bank of England MPC backtracks on planned rate cut
Latest inflation report forecasts larger overshoot of 2% target; there are “limits” to the extent to which above-target inflation can be tolerated, committee says
BoJ pushes back forecast of 2% inflation
Central bank admits it will take longer than previously expected to hit 2%, as it keeps monetary policy on hold
Banks not fully adapted to new prudential environment – BoE deputy
Firms need a “proper chance” to adapt to the “new world”, says Woods, warning that the banking system still looks fragile on some metrics, despite work by his predecessor, Andrew Bailey
Commodity prices create ‘strong pressure’ to lower interest rates – paper
Policy response to commodity price fluctuations has been stronger in the US, paper finds; commodity price shocks follow two cycles, with the most recent having impacts on policy rates
Riksbank signals low rates will stay longer
Swedish central bank says rates likely to remain on hold for longer than planned, with chance of an inter-meeting asset-purchase extension
RBNZ moves to publish policy rate forecasts
Central bank scraps forecasts of 90-day bank bill rate as relationship with policy rate has been affected by global regulatory changes
Brazil makes first interest rate cut in four years
Upbeat inflation figures prompt Central Bank of Brazil into action as Copom unanimously votes for 25bp cut; post-decision statement implies further cuts possible this year
Bank of Canada considered adding monetary stimulus, says governor
Balance of risk still within zone of current 'appropriate' policy, says Canadian governor; uncertainties surrounding exports and mortgage rules may be 'temporary' he says