Monetary policy
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
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
Riksbank cuts to new low, despite signs of overheating
Central bank pushes policy rate 15bp deeper into negative territory even as economy moves close to full capacity; board responding partly to policy easing abroad
Central Bank of Brazil faces ‘policy dilemmas’
Tombini facing tough challenge as inflation rises into double figures while the IMF predicts deeper recession; observers divided on what comes next
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
Monetary policy does not ‘persistently impact’ bank lending, paper finds
Working paper published by Central Bank of Cyprus examines the impact of interest rate changes on both lending and credit risk
GDP lag overcome with nowcasting, Sarb paper says
Nowcasting will assist policy-makers understand path of real economic activity, authors say, finding model outperforms others significantly
RBI says future action depends on government decisions
Rajan says further easing depends on government budget and the result of pay negotiations; efforts are continuing to improve transmission mechanism, which could push rates down
BIS deputy: animal spirits need stability
Investors need certainty over long-term prospects for sustainable growth, so more short-term stimulus by central banks is likely to make the problem worse, Pereira da Silva says
Responses to commodity shocks only have ‘small’ impact on investment, paper finds
Flexible inflation-targeting frameworks and exchange rates are ‘essential’ to limit the macroeconomic impact of commodity price volatility
Kganyago reiterates ‘hiking cycle’ as Sarb raises rates
Risks noted at previous MPC meeting are now materialising; continued volatility expected in the exchange rate
Capital controls essential for small open economies, Guðmundsson says
Small open economies cannot conduct fully independent monetary policy if they are unwilling to use capital controls at least some of the time, Icelandic governor says
State Bank of Pakistan reveals first MPC members
Formation of monetary policy committee is part of a broader drive towards independence and inflation targeting; one seat remains unfilled