Monetary policy
Bank capital matters for risk-taking channel of monetary policy, Norges Bank paper finds
Less capitalised Norwegian banks are more likely to extend credit to risky firms in response to a cut in the policy rate, author finds
Inflation target and interest rates about right, UK survey suggest
Median expectations of inflation for 2016 were 1.8%; largest share of UK public says it is best for the economy if interest rates stay where they are
Central Bank of Brazil calls for structural reforms
Inflation figures come down, but still nowhere near target range; central bank calls on government to ensure fiscal consolidation in longer-term
IMF’s Viñals announces ‘long and testing to-do list’ for policy-makers
Viñals says the plan for ‘great normalisation’ is more urgent than ever; calls for policy action beyond monetary and financial measures
RBNZ tweaks forecasting models and cuts key rate
Reserve Bank of New Zealand cuts rates by 25bp to 2.25% in attempt to prevent inflation expectations from falling further; updates models in wake of optimistic forecasts
Jamaica successfully restarts bond market, governor says
Government debt issuance in February was oversubscribed; Wynter hopes surplus liquidity will continue to increase, helping to accommodate ‘crowding-in’ of private investment
BIS paper: short-term interest rate may no longer be enough to set policy
Globalised debt markets, the falling long-term interest rate and dollar debt accumulation has altered every major aspect of the monetary transmission mechanism in emerging markets, authors say
Central banks running out of room amid turbulence, BIS warns
Confidence in central banks is “faltering” as policies prove impotent, while negative rates erode bank profitability and debt levels weigh on global growth
Regulation affects pass-through to current account, BoE paper finds
Discussion paper sets out theoretical and empirical backing for idea that low rates can cause a current account deficit to grow, in the presence of liberalised financial markets
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
Central bank models need to adjust to nature of exchange rate pass-through, paper says
Exchange rate pass-through shown to be incomplete, endogenous, nonlinear and asymmetric; working paper seeks to quantify effect over time
Snapshot: IMF reveals staff views on Argentina
IMF releases informal briefings compiled 2013-2015 in absence of Article IV; staff highlighted adverse effects of central bank and banking sector financing of government
Indian government unveils final MPC design
Bill has been amended to cut committee size to six and give governor a casting vote in the event of a tie; government also pressing ahead with plans to clean up banking sector
Democratic Republic of Congo moves to stabilise currency following unscheduled MPC meeting
Central bank outlines plans to sell foreign currency and increase reserve requirements; calls on government for supporting measures
RBI paper questions impact of global spillovers
Authors find money and credit markets in India are largely unaffected by spillovers, although there is an impact via debt markets and the indirect effects of global growth and inflation
IMF urges ‘comprehensive approach’ to growth that reduces reliance on monetary policy
International Monetary Fund calls for coordinated policy response ahead of G20 meetings; policy-makers ‘must act now’ to implement strategies
Riksbank minutes reveal knife-edge decision to cut
Cecilia Skingsley says decision was hardest since her appointment to the board; strong economy, weak inflation and unconventional policy make for tricky task
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
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”
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
Soaring inflation sees Mozambique hike by 100bp
Inflation reaches 11.25% in January as a result of food-price shock; central bank hikes while government attempts to focus on other figures
BIS paper examines impact of fiscal rules in Latin America
Authors note countries with rules with "wider coverage" and "supporting procedures" can be more stable; more widely, rules help them behave 'less procyclically'
Visitors to ‘play policy-maker’ at new MAS gallery
Monetary Authority of Singapore launches latest financial literacy initiative; visitors able to ‘play policy-maker’ through interactive programs
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