Monetary Policy
Majority of central banks do not take account of forecast errors
Surveys of inflationary expectations used widely, alongside macroeconomic and market indicators
Zambia holds rates despite double-digit inflation
Governor says inflation will decelerate faster than expected despite being three times target rate
Majority of central banks have power to issue debt for monetary purposes
Central banks pointed to draining liquidity as a reason for issuing debt
FX market intervention key tool for emerging market economies
Central bank markets departments perform a wide range of different roles
Communications Benchmarks 2021 – presentation
Central Banking’s communications subject matter specialist Daniel Hinge speaks with Christopher Jeffery about communications staffing and salaries, effective approaches and favoured channels
Chilean central bank steps up policy tightening
Board unanimously decides to increase interest rates by 75 basis points to 1.5%
Asset purchase programmes prevalent among advanced economies
But just 17% of emerging market economies said they operate a purchase programme
Majority of central banks use corridors to set market rates
A handful use floors due to unconventional policy, and some use other methods
Too great expectations from the ECB’s strategy review
The review process represents operational best practice, but will fail to unify the Governing Council
Salaries higher for monetary policy staff than markets specialists
Budgets for monetary operations/markets teams were larger, but monetary policy staff were slightly better compensated
Indonesian central bank to buy $30 billion debt from government
Central bank will receive below-market yield for most purchases in two-year programme
South Korea raises policy rate
Governor cites rising household debts and house prices as reasons to tighten policy
Powell says taper test has been met ‘with regard to inflation’
Fed chair tells Jackson Hole conference that slowing QE this year “could be appropriate”
ECB council divided on forward guidance, minutes show
Some senior officials argued new formulation risks inflation overshooting
Is the ECB’s strategy review enough?
The reformed framework may allow greater stimulus to tackle weak inflation expectations, but the Governing Council is already divided on what to do next
Central Bank of Iceland raises rates again
Above-target inflation and higher GDP growth justify second rate hike since May, MPC says
Hungarian central bank raises rates for third month running
MPC cautions inflationary pressures remain and forecasts return to target in mid-2022
Paraguay raises rates as start of ‘gradual normalisation’
Country is latest in Latin America to tighten policy, alongside Brazil, Uruguay and Peru
Brazilian minister says Mercosur could have single currency
President has also suggested monetary union with members of trade area
Bank of Israel delays rate hike as Covid-19 cases rise
MPC says it will continue with accommodative policy despite GDP growth and on-target inflation
Fed may taper asset purchases this year, say FOMC minutes
Federal Reserve staff warn US financial system has “notable” vulnerabilities
Norges Bank signals September rate hike
Norweigan central bank stresses long period of low rates increases financial stability risks
New forward guidance is “elemental” for ECB strategy, Lane says
Chief economist implicitly disagrees with Belgian governor’s criticism of new wording