Interest rates
Israeli rates rise as Fischer enforces third hike
Bank of Israel’s Stanley Fischer hikes prime rate to 1.25%
Botswana slashes a point off rates
Bank of Botswana cuts key rate to 10% - a record low
Jordan cuts by half a point
Central Bank of Jordan knocks 50 basis points off key rate as deflation strikes
Cutting interest rates the best solution: ECB paper
A European Central Bank working paper argues that interest rate cuts and controlled inflation help adverse financial conditions, while simplistic interpretation of Taylor rule does not
Fed does not respond to oil price shocks: CEPR paper
CEPR paper argues against the standard view that Fed’s policy responses to oil-price-led inflation caused economic instability
Iceland cuts on further signs of stability
Central Bank of Iceland continues with “gradual” easing as currency stabilises
SNB steps towards exit
Swiss National Bank announces end to credit easing
China to maintain “moderately loose” policy
People’s Bank of China indicates rates will be kept low for some time to support growth and stability; statement echoes the pledges of central economic conference
Israel minutes show division between advisers
Minutes of the Bank of Israel’s November meeting reveal one of the four advisers to the governor said rates should be left unchanged, while three voted for a 25bp hike
Unconventional monetary policy reviewed
Claudio Borio and Piti Disyatat set out a framework of definitions to help categorise and clarify the functions of various monetary policy tools, and assess central banks’ actions since the crisis
Fed behaviour matches optimal target rule
A discussion paper on the Fed and monetary policy rules argues that an optimal target rule, rather than the Taylor rule, best explains the central bank’s policy behaviour
Brazilian economy on the up, minutes show
Central Bank of Brazil’s policy meeting minutes also show inflation is under control
Zero lower bound may have cost US $1.7 trillion
San Francisco Fed’s John Williams argues zero bound on interest rates has had negative effect and could continue to do so
Foreign demand for currencies and the Friedman rule
A new paper from two economists at Columbia University finds that the Friedman rule ceases to be Ramsey-optimal when foreign demand is taken into consideration
Three-way split in Bank’s November QE decision
Minutes reveal calls for both a larger expansion and no change
Fed’s Bullard: rates could stay on hold until 2012
President of St Louis Federal Reserve says rates would remain at record lows for next two-and-a-half years if behaviour after previous recessions is repeated
RBA: economy at greater capacity than expected
Minutes of the Reserve Bank of Australia’s November meeting show rate-setters’ optimism and explain their decision to implement second rate hike
Sri Lanka cuts rates
Central Bank of Sri Lanka cuts benchmark borrowing cost to 7.5%, narrows rate corridor
Korea holds rates for ninth month
Bank of Korea keeps its base rate unchanged, citing resurgence in domestic economic activity
European Central Bank – November Monthly Bulletin
ECB’s monthly report suggests eurozone inflation rates will inch back into positive territory towards the end of the year
Hungary split on cut
Rate-setters from the National Bank of Hungary were divided over the size of the cut required, according to minutes of the October policy meeting
Rate decisions this week
The majority of central banks that reviewed rates this week made no change, pointing to the need for a sustainable recovery
Bank compromises with £25 billion QE expansion
Bank of England rate-setters vote for moderate expansion of quantitative easing, citing conflicting economic pressures
Fed remains guarded on rate hike
Federal Open Market Committee keeps key rate and tone unchanged; caps agency debt purchase programme at $175 billion