Central Banks
RBI targeting 'greater internationalisation' of rupee
Reserve Bank of India executive director Padmanabhan says currency is a ‘natural candidate’ for internationalisation; aims for ‘careful and gradual’ progress
Martowardojo sworn in as governor of Bank Indonesia
Former finance minister promises to combat inflation and increase the stability of the banking sector
Central bank operations push up Target2 turnover
ECB annual report says central banks helped push the value of payments in Target2 system to €634 trillion in 2012; balances diverged as German claims and Spanish liabilities increased
Gideon Gono fears ‘financial isolation’ for Zimbabwe
Central bank governor believes country could lose access to global payments platforms and external lines of credit if the indigenisation of foreign-owned banks is forced through
Danish paper uses three centuries of data to show tail risks underestimated
Research says severe stress cannot be properly understood with short time horizons; suggests results could be used to design tougher stress tests
Cyprus challenges accusations of weak anti-money laundering controls
Central bank and finance ministry say summary of two reports into anti-money laundering controls in Cyprus gives a biased view of the results
New York Fed forecasts support continued easing
Staff forecasts predict inflation and unemployment are unlikely to make significant progress toward their target levels in 2013
Sarb and Nigeria hold steady as Ghana hikes rates 100bp
Bank of Ghana responds to inflationary threat with one percentage point rate rise, in addition to changes to affect policy transmission; Sarb and Central Bank of Nigeria see threats but hold steady
Fed research digs deeper into operation of QE
Working paper looks at the composition of investors selling assets in the Federal Reserve’s quantitative easing programmes, finding evidence for a ‘preferred habitat’ theory of transmission
IMF paper refines measurement of monetary policy transmission
Working paper breaks monetary policy into endogenous and exogenous changes, finding this is an important distinction for explaining variations in policy transmission across banks
Bullard says inflation must pick up before asset purchases can be slowed
St Louis Fed president says future of QE should depend on inflation developments; suggests FOMC is more likely to taper than increase asset purchases
Bank of Japan ¥2tn intervention fails to halt Nikkei slump
BoJ moves to calm bond volatility as Bernanke comments and China data spook Japanese markets
Fed minutes hint at end to era of expansion
A number of participants would like to adjust asset purchases downwards as early as next month, pending positive economic data
Bernanke remains dovish in face of stability threats
Fed chairman says low interest rates are providing significant benefits to growth and heading off ‘incipient’ deflationary pressures; hints QE could be reduced soon, but only if data allow
Israeli committee split over rate cut, minutes reveal
Governor Stanley Fischer used casting vote to keep May rate cut to 25bp after half the monetary committee called for a sharper reaction to tackle the appreciating shekel
IMF says forward guidance could reinvigorate UK monetary policy
IMF statement on UK economy suggests Bank of England provide assurances that rates will stay low until economic recovery 'reaches full momentum', to combat diminishing impact of monetary policy
BIS paper finds higher US bank taxes may have only moved stability risk
Research into higher taxes imposed on wholesale funding by US banks finds they did reduce reliance on short-term borrowing, but says risks may simply have been pushed into foreign banks
National Bank of Hungary optimistic on SME lending
Hungarian central bank releases latest financial stability report; suggests new funding-for-growth scheme will lead to a recovery in lending this year
Norges bank governor justifies taking ‘a few years’ to increase inflation
Øystein Olsen says it is appropriate for central bank to tolerate below-target inflation; does not want to risk the build-up of financial imbalances
Central Bank of Ireland stresses importance of long-term bank profitability
Irish macro-financial review highlights need for banks to support the real economy with credit at sustainable rates; increases in bank profitability also necessary for long-term sustainability
Riksbank deputy appointments boost easing hopes
Martin Flodén and Cecilia Skingsley selected as new deputies; seen to shift the executive board in a more ‘dovish’ direction and increase the chances of a rate cut
Kuroda says JGB volatility not hitting the real economy
Bank of Japan governor says central bank may take action to address spike in Japanese government bond yields but does not expect any significant impact on real economy yet
Dudley calls for new plan to avoid market overreaction when Fed heads for the exit
New York Fed president pours cold water on suggestions of an imminent exit from QE, but says the FOMC needs to rethink its ‘stale’ plan on how an exit will ultimately be accomplished