Interest rates
IMF welcomes Indian inflation progress, but RBI should ‘stand ready’
IMF welcomes progress made with inflation targeting in India; calls for “growth-friendly” fiscal consolidation to support monetary policy
Turkey’s Kenç sheds light on central bank ‘roadmap’
Deputy governor tells Central Banking conference that a 'roadmap' of policy changes helps improve confidence in the economy; says the central bank has gained market trust despite independence fears
US monetary policy contraction means drop in global output – paper
Raising interest rates in the US leads to lower global output and inflation in the short term; most 'pronounced' responses evident in the mid-1990s to mid-2000s
BoJ’s Nakaso insists deposit rates are not going negative
Deputy says a 'wide range' of interest rates will fall due to the BoJ’s negative rate policy, but experience in Europe implies depositors will not suffer
Turkish MPC eyes volatility as it prepares move to standardised framework
Decline in volatility will be key factor in move to a narrower interest rate corridor, minutes say; central bank expects disinflation in February after headline figure hit 9.6% in January
Central Bank of Malta revamps main structural model
Version three of the ‘Stream’ model captures the interlinked nature of the fiscal and financial sectors, with extra detail added to the financial block and new data used for estimation
Mexico’s stress tests reveal some institutions remain ‘vulnerable’ in extreme scenarios
Stress tests indicate that even in adverse scenarios banking sector remains sound; some banks and investment funds are vulnerable to extreme scenarios, including interest rate adjustments
Carney airs scepticism on negative rates
Bank of England governor warns negative rates may only work through exchange rate channel, which would result in a ‘zero sum game’
Denmark focuses on long-dated issuance amid low rates
National Bank of Denmark’s 2016 debt issuance strategy uses long maturities to reduce interest rate risk as low rates hold down costs; return to more normal footing after last year’s suspension
Hong Kong activity should weather higher rates – paper
Research published by IMF argues consumption and investment will “remain robust”, despite increase in interest rates in tandem with the US
NY Fed’s Potter ‘extremely pleased’ with rate control
The Fed’s framework for controlling money market rates has proven ‘effective’ in the wake of December’s lift-off, according to executive vice-president Simon Potter
Wage settlements may force Sarb to hike rates further, deputy says
Sarb may look to tighter monetary policy to curtail any second round inflation effects from wage settlements; headline figure already above target range
Paraguay’s Valdovinos: world has a lot to learn on macro-prudential tools
Paraguayan governor underscores importance of macro-prudential policy but says global economy still has a lot to learn; monetary policy is 'too blunt' to solve all problems
Domestic inflation remained ‘benign’ in 2015 – Rwandan statement
Inflation in Rwanda continued to record “moderate” and “low” levels throughout last year; current monetary policy stance “justified”
Peso depreciation casts shadow over Mexico rate decision
Central bank adamant it is not in a hiking cycle after 50bp rise; government taking steps to enforce measures on Pemex
Global growth has ‘flat-lined’, says OECD chief economist
Global economy expected to expand no faster than in 2015; current monetary policy stance ‘insufficient’ to spur growth
FOMC members agree uncertainty over US prospects has ‘greatly increased’
Global uncertainty and financial market volatility increases downside risk for US economy, FOMC members say; committee members express different views over use of fan charts in projections
Namibia hikes to ‘align’ rates in region
Bank of Namibia hikes by 25bp to 6.75%, following decision in South Africa in January after depreciation of rand hit inflation outlook
Fed’s Harker adopts more cautious tone on policy
Philadelphia Fed president says it may be more 'prudent’ to wait for stronger inflation data before hiking for a second time; sees inflation rising more gradually than before
RBA board agrees China has ‘scope to respond’ if outlook worsens
Minutes from February meeting reveal board is wary a ‘sharp slowing’ in economic activity could spill over to other economies in region, though Chinese authorities could respond
Fiscal dominance can invert transmission mechanism, Lahiri and Patel find
Authors show ‘statutory liquidity requirement’ and fiscal dominance can invert the effects of monetary policy or render it impotent; suggest ‘rebalancing’ India’s reform agenda
Australian governor Stevens stresses policy ‘flexibility’
Governor says Reserve Bank of Australia has scope to ease monetary policy if need be, though economy expected to continue expanding
Yellen says Fed unsure about legal issues surrounding negative rates
Fed chair tells Congressional committee she sees no reason why the Fed could not cut below zero if need be, but legal issues have not been ‘fully investigated’
Bank recapitalisation is a ‘powerful’ policy instrument, paper suggests
Economy likely to remain in an ‘anaemic state’ until certain conditions met, research says; bank recapitalisation more effective than fiscal expansion in encouraging aggregate demand