Oil
BoE’s Weale warns MPC may have underestimated oil price impact
A failure to grasp the full importance of ‘tail events’ may have caused the monetary policy committee to underestimate the strength and duration of the oil shock’s impact on inflation, Weale says
RBNZ paper investigates changes to inflation expectations after oil price shocks
Research suggests changes in expectations following real oil price shocks have ‘little or nothing to do with actual inflation outcomes’
Norway’s oil fund boosted by market rally and weak krone
Fund returns 5.3% in the first quarter, a new record in krone terms, led by strong equity returns and weak currency; fund continues to use clout to encourage ethical decisions by firms
Azerbaijan to legislate central bank recapitalisation
Parliament prepares draft law to recapitalise Central Bank of Azerbaijan after foreign exchange losses leave balance sheet in the red
Bank of Canada sees 'front-loaded' oil price effects
Latest monetary policy report estimates Canadian economy was stagnant in first quarter as negative effects from lower oil prices hit earlier than expected; forecasts rebound in coming months
BoE’s FPC flags climate change financial stability risks
Financial policy committee divides issue into physical risks and transitional risks, seeing some potential for instability from climate change but calling for further research
Olsen: Norway needs lower labour costs
Norges Bank governor Øystein Olsen argues labour costs must be brought into line with those of Norway’s trading partners to support a rebalancing of the economy away from oil
Norges Bank faces ‘ripple effects’ from oil price collapse
Norway heading in opposite direction to generally favourable global trend, central bank’s annual report warns; banking sector profitable and resilient nonetheless
McCafferty: BoE is right to look through oil price decline
The sharp fall of oil prices will have a temporary impact on inflation, since ‘supply rather than demand has been the dominant factor’, says McCafferty
Colombian paper finds structure matters in modelling oil shocks
Working paper finds evidence that the impact of an oil price shock on an oil-exporting country such as Colombia can be large, but depends on the structure of the economy
Poland publishes forecasts behind ‘final’ rate cut
Economics Institute within central bank lowers forecast for inflation in 2015 to -0.5%, down from 1% in November; MPC says last week’s cut ‘concludes’ its easing cycle
Sarb deputy governor fears for oil-exporting countries
The positive and negative shocks of falling oil prices are ‘asymmetric’ and the impact on oil-exporting countries could ‘elevate’ global financial stability concerns, warns Groepe
Kazakh central bank expects to hit inflation target if oil averages $50 or $60
National Bank of Kazakhstan publishes two forecasts with different assumptions about oil price; plans to limit market volatility by expanding monetary instruments
Azerbaijan devalues currency by a third
Central bank follows up last week’s decision to abandon its peg in favour of a currency basket by devaluing the manat by 34% against the US dollar
Central Bank of Nigeria abandons FX window
Latest attempt to halt the sliding currency sees central bank cease to offer foreign exchange auctions, but interventions continue in the interbank market
Central Asian currencies under threat as Azerbaijan abandons peg
The Central Bank of Azerbaijan’s decision to drop its dollar peg and move to target a basket could have knock-on effects throughout the region, where currencies are already under pressure
Canadian economy may have more slack than headline figures suggest, says senior deputy
Bank of Canada's Carolyn Wilkins says measures of labour market slack show ‘greater unused capacity' than broader indicators
National Bank of Angola to ‘coerce’ banks into parting with their dollars
Angola’s central bank will intervene when banks deny dollars to their customers, in the face of a shortage of foreign currency due to plunging oil prices
Sama governor calls for subsidy cuts
Fahad Al-Mubarak says the Saudi Arabian economy is being hampered by various inefficiencies, including excessive subsidies on energy and water
Prasarn dismisses threat of deflation as headline rate goes negative
Thai governor pens letter to finance minister after headline inflation falls to -0.4% in January; IMF sees ‘scope for further easing' as two MPC members dissent on rate hold
IMF backs Canada cut despite overvalued housing
Fund says central bank's decision to lower rates for first time in four years is ‘in line with staff advice'; says housing market overvalued by up to 20%
Energy producers should lower interest rates following drop in oil prices, suggests Norges Bank paper
Given spillovers to rest of economy, optimal policy calls for a reduction in interest rates, finds study; central banks face ‘trade-off' between stabilising inflation and closing output gap
Belgian research examines policy response to oil price shocks
To curb the wealth-shifting effect of oil price shocks ‘optimal policy calls for a large but short-lived increase in the real interest rate’
Canada cuts rate for ‘insurance’ against oil price drop
Stephen Poloz says the fall in oil prices in ‘unambiguously negative’ for the Canadian economy as central bank unveils first rate change in over four years