Monetary policy
Olsen says Norges Bank must tread carefully as it nears the zero lower bound
Governor says effects of monetary policy may become less certain; review of monetary policy framework about to begin
Further policy easing will be required – RBNZ assistant governor
Another rate cut on the cards despite improved inflation outlook, says McDermott, emphasising need for accommodative monetary policy to push inflation to middle of target range
BoE paper tackles ‘sectoral co-movement puzzle’
Adding labour market frictions and habit formation helps to solve the problem of models implying a monetary contraction produces little response in output
Review proposes reforms to Riksbank research
External team recommends restructuring department, increasing its involvement with policy and boosting output – though it says Riksbank research is already “successful”
BoE’s new MPC member suggests tweaks to policy approach
Michael Saunders says models that assume pre-crisis level for equilibrium unemployment may be misleading; new FPC member grilled on other commitments in the US
Greater role for capital markets would not necessarily harm policy transmission – ECB’s Praet
A ‘range of common factors’ is affecting both banks and non-banks, ECB chief economist says
UK PM says she will deliver ‘change’ to monetary policy
Theresa May criticises monetary policy for punishing savers and those without assets, promising to deliver change
BoE’s Saunders expects higher post-Brexit growth than central forecast
Bank of England’s newest committee member says the labour market is likely to prove more sluggish than the consensus suggests, but growth will be more positive
Fall in inflation only ‘temporary’ – Sarb governor
Positive factors underlying inflation decrease may not be here to stay, says Kganyago, emphasising a continued rise in inflation could threaten long-run growth
Central Bank of Solomon Islands commits to promoting private sector credit growth
Levels of liquidity “more than adequate”, latest monetary policy review says; central bank to maintain levels of liquidity by continuing to issue bills
RBI’s new MPC cuts rate at first meeting
Debate was “frank, often intense, but always friendly” says governor Urjit Patel, after monetary policy committee votes unanimously for a cut
ECB paper aims to improve small-scale models for assessing policy shocks
Paper outlines a structural factor model, which the authors say better accounts for the asset price impact of monetary policy shocks
US spillovers stronger for some countries than others – IMF paper
Paper assesses how US normalisation will spill across borders, identifying conditions where countries are most likely to be affected
IMF financing ‘constrained’ policy space in Ukraine, report finds
Earlier debt financing would have been useful for Ukraine, report says, while praising central bank efforts to stabilise the financial system
Independence, liquidity and a level playing field – yet another impossible trinity?
Jesper Berg warns it will likely be impossible to balance the demands of monetary policy independence, liquidity standards and achieving fairness for all banks
IMF: rise of non-banks is reshaping policy transmission
Pass-through of monetary policy grows as non-banks become more important, but changed transmission mechanism demands better data to understand risk-taking channel
Inflation expectations more sensitive near the zero lower bound – IMF study
IMF study examines whether monetary policy can boost inflation in constrained environment; countries near zero lower bound could see inflation respond more to shocks
Sama intervenes to ease liquidity pressure on banks
Saudi central bank makes deposits worth over $5 billion at commercial banks struggling with low liquidity, and introduces new repo facilities
Carney: green finance could help reverse long-run rate decline
Bank of England governor says green finance has the potential to send capital where it is most needed, and help advanced economies escape the problem of falling equilibrium interest rates
Bank of Israel moves to eight-meeting policy cycle
Cut in number of meetings reflects stability of economic indicators and will allow for more detailed analysis at each meeting, central bank says, though one member criticises loss of flexibility
RBA’s Lowe: we are not ‘inflation nutters’
Philip Lowe underscores central bank’s “balanced” approach to controlling inflation in his first public appearance as RBA governor, and highlights other initiatives
Central Bank of Kenya cuts rates despite new credit legislation
Commercial banks to amend lending rates again following a cut in interest rates; bank launches 50th birthday initiatives including new website
Declining inflation reduces pass-through effects for emerging markets – BIS paper
Central banks should be less fearful of floating their exchange rates; emerging markets should take note exchange rate channel could be “less effective” in affecting inflation
Reserve requirements complement monetary policy in small open economies – paper
Paper examines the use of indirect and direct monetary policy instruments in three Caribbean economies; increases in the reserve ratio are successful in reducing private sector credit