Monetary policy
Chilean central bank spells out risks to outlook
Central bank expects inflation to return to 3% target by end of 2017 according to latest forecasts; details risks from home and abroad to macroeconomic outlook
Kuwait joins hikers club in wake of Fed rate rise
Kuwait look to strengthen currency after Fed rate rise; UAE and Saudi Arabia, which operate with dollar pegs, also move
IMF paper says transmission is working but lopsided in the Dominican Republic
Researchers say the Dominican Republic has been successful in establishing a monetary transmission mechanism, but future work should focus on balancing pass-through to deposit and lending rates
Economists point to key factors for BoE rate decision coming into ‘sharper relief’
Developments in labour market represent crucial signal for monetary policy move, but shocks from a Fed hike, commodities or further turbulence in emerging markets could all come into play
Turkish economy is braced for impact of global policy normalisation, says Başçı
Erdem Başçı says measures taken to date have made Turkish economy more resilient to external shocks; expects inflation to trend down towards target next year after rough 2015
Dynamics and volatility of capital flows a concern, says Mexican deputy
Manuel Ramos-Francia says EM policy-makers are concerned not only with the size of capital outflows, but also the dynamics of those flows, at conference hosted by Bank of Mexico
BIS: Artificial calm in markets cannot last
Quarterly review presents latest evidence of fault lines running through financial markets; Claudio Borio says tension between market behaviour and underlying conditions must be resolved eventually
Consensus key for moving forward in Greece, says central bank
Bank of Greece stresses need for ‘unobstructed’ implementation of creditor agreement, as it publishes latest interim report on monetary policy
BoJ’s Kiuchi wants to reduce flow of QQE
Board member says reduced flow of asset purchases would help relieve ‘excessive pressure’ on the Japanese government bond market and make monetary policy more ‘sustainable and stable’
Riksbank deputy open to scrapping CPI as target variable
Quirks of Swedish CPI make it awkward for use as the monetary policy target variable, Per Jansson says; bringing back tolerance band also a possibility
South African review charts motivations behind resumption of tightening cycle
One of three chief considerations was the path of exchange rate and the risks it posed to inflation, which increased as the year went on
Historical data supports fiscal theory of the price level, Bundesbank paper argues
Data from the US, Germany and Italy give policy-makers useful data on the long-term influence of fiscal policy on inflation, a Bundesbank discussion paper argues
Colombia reinforces inflation target as it tightens policy
Central Bank of Colombia board expects to reach inflation target within two years; raises policy rate by 25bp to 5.5% as expectations increase
Nigeria cuts rates to encourage growth in ‘bold’ decision
The central bank lowers the policy rate by 200bps as part of a package of measures aimed at supporting growth and easing credit conditions
BoE advised to publish record of joint MPC/FPC meetings
Treasury Committee advises Bank of England to publish material from joint meetings of the MPC and FPC
BIS paper presents interbank money market model
Researchers produce ‘search-based’ model designed to reflect interbank markets in the presence of a central bank corridor system, allowing them to compute the effective interest rate
‘We will do what we must’ to hit target, says Draghi
ECB governor hints at further easing at next month’s monetary policy meeting
Mass walkout at RBI disrupts clearing and settlement
The majority of the RBI’s 17,000 staff took ‘mass casual leave’ today, interrupting some RBI operations, though normalcy was ‘largely’ restored after negotiations
Sarb raises rate 25bp now to avoid bigger move later
Increasing risk of inflation spurs the South African Reserve Bank to raise its key rate by 25 basis points to 6.25%; two out of six MPC members preferred not to move
Canadian paper sees costs to leaning against the wind
Research estimates difference in policy rates between ‘lean’ and ‘clean’ central banks, while identifying costs in terms of inflation and output deviations
BoE researchers model trend inflation with ambiguity
Researchers develop a model featuring positive trend inflation determined in part by the degree of ambiguity around central bank actions
BIS’s Borio challenges monetary orthodoxies
Claudio Borio questions current concepts of equilibrium, monetary neutrality and deflation, calling for a rethink of monetary policy frameworks – and potentially mandate changes
BIS paper models non-linear eurozone crisis impact
Researchers attempt to capture endogenous amplification mechanisms in causing widened lending spreads during eurozone crises
Identifying the effects of structural shocks exposes problems with real-time data, researchers say
Using a model that identifies the effects of structural shocks, the paper finds ‘substantial and systematic’ differences between ways real-time and final data respond to monetary shocks