Monetary policy
Pakistan’s Anwar presents plan for financial system growth
Governor of the State Bank of Pakistan gives 10-point plan for growth in the financial system to boost the economy and improve the ‘potency’ of monetary policy
Bank of Korea foresees long road to recovery
Economic outlook report predicts sluggish narrowing of Korea’s negative output gap; central bank keeps rates on hold
Kenyan interest rate continues to plummet
Benchmark interest rate nearly halved since September; latest cut intended to increase uptake of expanding private sector credit
French paper warns of forward guidance perils
Study published by Banque de France says efficient communication to an inattentive audience can only be achieved if supported by effective monetary policy
Riksbank board members clash over inflation forecasts
Minutes from December monetary policy meeting show disagreement over impact of 25-basis point rate cut on inflation
BoJ research warns of unintended policy consequences from Libor
Working paper says reference rates such as Libor can provide valuable information to markets but may also skew central bank policy-making by adding noise to credit spreads
Restrictions on Sri Lankan banks relaxed
Foreign exchange trading limits on Sri Lanka’s commercial banks relaxed by central bank as country pursues ‘second wave’ of growth
Fed research asserts ‘potency’ of quantitative easing
Working paper finds large-scale asset purchases by the Federal Reserve equivalent to a cut in the Federal funds rate of more than 3%; estimates are higher than previous studies
BoJ boosts easing amid mounting political pressure
Policy board votes to increase asset purchases by ¥10 trillion ($119 billion); close proximity to election raises questions of political influence in decision
Central Bank of Nigeria denies Sanusi arrest warrant rumours
Central bank says no arrest warrant for Sanusi Lamido Sanusi issued – contrary to local media reports – but admits governor has defied parliamentary summons
Buba’s Weidmann on the virtues of sound finances
Bundesbank president stresses the need for fiscal rectitude in monetary union
Banque de France paper tests policy interactions
Researchers examine optimal configurations of monetary and macro-prudential policy under different conditions; find monetary policy cannot affect financial stability in some cases
BoE’s Weale urges use of more nuanced economic models
Basing models on a single representative agent risks obscuring important results, says Bank of England’s Martin Weale; alternative is greater emphasis on behavioural economics
French research says monetary policy can offset herding
Banque de France working paper says interest rate hikes can be used to eliminate asset price bubbles caused by investor herding behaviour
RBA’s Stevens addresses growing importance of policy spillovers
Australia’s Glenn Stevens says policy-makers are becoming increasingly aware of the need to consider the wider impact of domestic decisions, although discussion is in its infancy
Finland paper sizes up Chinese reforms
Research published by the Bank of Finland examines financial liberalisation in China and what it means for the country’s monetary policy framework
Central Bank of West African States boosts growth estimates
Monetary policy committee praises member states’ investment in agriculture and infrastructure; holds benchmark interest rate
BIS research identifies ways to smooth the financial cycle
Bank for International Settlements working paper designs model of financial cycles and examines the difficulties of reducing the size of their peaks and troughs
Malawi minutes explain rate rise
Interest rate increased by 400 basis points as inflation hits 30.6% and the Malawian currency depreciates ‘faster than expected’
Sarb’s Mminele highlights risks to emerging markets from QE
Daniel Mminele says unconventional monetary policy has complicated policy-making for emerging market central banks
Turkish minutes urge government to maintain discipline
Central Bank of the Republic of Turkey says annual inflation likely to come in lower than previously forecast, but this depends on the government adhering to fiscal commitments
BoJ’s Shirai examines link between demographics and monetary policy
Sayuri Shirai says the Bank of Japan has been forced to respond to the twin challenges of an ageing population and a string of economic crises, making monetary policy-making difficult
Czech paper evaluates monetary policy lags
Finds greater financial development is correlated with the slower transmission of monetary policy
Shirakawa deflects criticism over off-target inflation
BoJ chief says Japan needs stronger growth potential for effect of loose monetary policy to feed through fully; urges government to take action