Monetary policy
Turkey keeps tightening with secondary instruments
Hike in late liquidity facility gives room for further tightening, as the central bank responds to inflation hitting double figures
BoE’s Forbes dissents as inflation looms
MPC member votes for 25bp hike as inflation looks set to exceed target until “at least” 2020; other members sitting on the fence, for now
Fed delivers 25bp hike
Fed makes rate hike that many FOMC members have been hinting at for weeks; committee gives bullish signals on the outlook
IMF research uncovers ‘puzzling’ effect of QE on the current account
Authors see QE having significant impact only when capital mobility is low; findings suggest “unexplained variation” between QE and capital mobility
Tanzanian central bank slashes discount rate
Central bank cuts discount rate for the first time since 2013, from 16% to 12%; increase in NPLs has discouraged commercial banks from lending
Finnish paper analyses Chinese central bank’s ‘window guidance’
PBoC may have to move away from using lending quotas, researchers argue
CBRT under pressure as inflation breaches 10%
Consumer prices rising at their fastest rate since 2012, leaving the central bank in a difficult position
RBNZ’s Wheeler: policy now has ‘neutral bias’
Risks to future rate movements “equally weighted”, governor says, though plenty of domestic and global risks could knock the outlook off course
Interest rate effects weaker at low levels – Borio and Gambacorta
Supply of loans becomes less responsive to policy rate movements when interest rates are already very low, likely due to impact on bank profits, authors say
Fed needs quarterly monetary policy report, Bullard says
St Louis president argues for better Fed communication when it comes to monetary policy decisions; a quarterly report would align the US with international best practice
Bank of Italy paper looks at impact of monetary policy shocks
The impacts of eurozone and US shocks have diverged since the onset of the financial crisis, the working paper says
Fed could raise rates ‘fairly soon’ – minutes
Minutes show committee members will be watching labour and inflation data very closely; raising rates would offer “flexibility” in responding to economic changes
Plummeting inflation prompts Bank of Zambia action
Central bank cuts policy rate by 150bp, in addition to a cut to the overnight lending rate and reserve ratio; inflation falls from over 18% to 7% in a matter of months
Uncertainty about momentum in the labour market – RBA minutes
“Mixed” picture in Australian labour market shows unemployment increasing alongside full-time employment; spare capacity likely to persist “for some time”
Fed’s Mester says public should not hold policymakers to ‘unrealistic account’
Monetary policy cannot and should not be used to spur productivity growth, says FOMC member; unwinding of Fed’s mortgage portfolio may help guard it against calls to enter the realm of fiscal policy
IMF praises BCEAO’s latest policy actions
Latest round of measures will result in stronger banking sector, mission chief says; rejuvenation of interbank market will help monetary policy effectiveness
Fed’s Williams says labour market figures are accurate
Current unemployment rate “accurately” reflects the state of the labour market; San Francisco Fed researches a broader measure of the market
Central bank of the year: Bank of England
The BoE has undergone a major restructuring that has reshaped its organisational framework, research and public interaction – leaving it well positioned to meet the challenges ahead after a tough year
Transparency: Bank of Canada
Communications embedded in the policy process, fresh thinking on shared content and an expanded senior team show the central bank’s commitment to staying at the leading edge of transparency
Market ‘tightness’ affects QE success – Riksbank paper
Model accounting for the demand and supply of bonds allows authors to reveal new insights into the price and liquidity impact of asset purchases
Consumption shows asymmetric response to shocks – BoE paper
Households appear to respond more strongly to temporary negative shocks than positive ones, and effects are different for borrowers and savers
Graeme Wheeler to stand down this year
RBNZ governor will not seek a second term; deputy to take interim role as succession process complicated by elections
Kazakhstan’s Akishev sets sights on lower inflation
Governor hails success with inflation targeting and says central bank now plans to push inflation even lower; NBK also working on new banking supervision framework
Kenya’s monetary policy framework under threat – IMF
New interest rate caps are “constraining” the central bank’s ability to conduct monetary policy while negatively affecting banks’ profitability, but action plan could see them eliminated