Exchange rate
Bank of Mexico hikes following Trump election shock
Peso hit hard by Donald Trump's election victory, with possible US fiscal expansion and Fed rate hike likely to draw more capital from emerging markets, central bank says
BIS’s Shin links dollar strength to global malaise
Head of research outlines how dollar strength affects leverage globally, causing deviations from covered interest parity and potentially impacting growth and trade
Reserve Bank of Malawi issues new highest denomination banknote
Central bank issues new denomination as inflation and depreciation continue; 2,000 kwacha note will enter circulation next month
Jamaica establishes foreign exchange market working group
Governor Wynter calls meeting to inform market about new group, established to formulate proposals to address the depreciation of the Jamaican dollar
RBNZ delivers rate cut as exchange rate strength persists
Board reaffirmed move in light of Trump victory, but cut has been in the offing for some time as NZ dollar strength holds down inflation
Tuvalu eliminates foreign exchange restrictions
Tuvalu government repeals Exchange Control Act to adhere to IMF articles of agreement; move will help foster investment and international trade, fund says
Central Bank of Egypt devalues currency
Egyptian pound falls 32% as central bank moves to align official and black market rates; IMF mission chief welcomes additional exchange rate flexibility
More research needed on exchange rate pass-through, ECB article says
Research on effects of different shocks on inflation “still in an incipient phase”
Egypt PM signals move to unify exchange rates
Sherif Ismail tells parliament central bank will soon unify black-market and official rates; IMF moving closer to agreement on funding
Hedging demand can cause covered interest parity violations – BIS paper
US dollar forward hedging demand can cause covered interest parity to fail even when markets are calm, authors say, helping explain this post-2012 anomaly
Public sector balance sheet poses risks for Dominican Republic – paper
IMF working paper analyses balance sheet developments in the South American nation’s economy; foreign currency exposure could amplify risks, authors say
Still room to support domestic economic growth after cut, says Ugandan governor
Exchange rate movements remain key risk to inflation, says Tumusiime-Mutebile, as Bank of Uganda cuts interest rates by 100bps
UK inflation jump to 1% is just ‘tip of the iceberg’
Latest inflation data shows leap from 0.6% in August to 1% in September; former MPC member Sentance says this is just tip of the iceberg
Foreign investment ‘restored’ exchange rates after policy shocks – paper
Data from Colombian central bank shows foreign exchange intervention have “short-lived effects” on prices; over the medium term, foreign capital flows push exchange rate back to original level
Evolution of exchange rate main risk to inflation – Mexican deputy
Electoral uncertainty playing on the minds of policy-makers at Bank of Mexico, says Guzmán Calafell; higher pass-through to prices now more of a risk thanks to peso depreciation
Don’t underestimate East Africa’s potential, says Sarb deputy
Eastern region of the continent benefitting from slower inflation and improved regulatory regime, Mminele says; “strict” fiscal discipline must be applied throughout the region
Fiscal policies the answer to commodity decline in Africa – BIS paper
Counter-cyclical policies have done all that they can, paper says, adding it is now time for exchange rate and fiscal policies to bear the burden and spur growth
IMF: rise of non-banks is reshaping policy transmission
Pass-through of monetary policy grows as non-banks become more important, but changed transmission mechanism demands better data to understand risk-taking channel
BoE’s Salmon warns forex industry on adherence
Chris Salmon, the Bank of England's executive director for markets and lead on global code adherence, says regulation could be on the horizon as soon as 2020 if market participants don't adhere to the new Global Code
Declining inflation reduces pass-through effects for emerging markets – BIS paper
Central banks should be less fearful of floating their exchange rates; emerging markets should take note exchange rate channel could be “less effective” in affecting inflation
Markets back under central bank ‘sway’ – BIS quarterly review
Recent equity rally is “more stick than carrot”, says Claudio Borio, as latest report points to fresh signs of discomfort among banks and continued market distortions
Eurozone exchange rate pass-through has declined over time – researcher
Italian exchange rate pass-through has behaved very differently from other major eurozone economies – particularly Germany’s – paper finds
PBoC faces the ‘most challenging work of all central banks’ – HKU’s Xiao
The People’s Bank of China needs to meet short-term goals of exchange rate and price stability to achieve longer-term structural and financial reform, says Hong Kong University professor Xiao Geng
Kganyago justifies Sarb’s response to ‘troubling mix’ of issues
Sarb governor says the public should be “satisfied” but not “happy” with the current economic outlook, given that monetary policy has only offset some of the problems causing high inflation