Exchange rate
Kenyan central bank defends depreciating shilling
The Kenyan shilling has dropped almost 5% in value against the dollar since May; central bank insists this is a necessary rebalancing and does not pose any damaging inflationary pressures – yet
Currency appreciation not just bad news for exporters
The use of cheaper imported intermediates compensates for 0.2 percentage points of a 1% currency appreciation followed by proportionate drop in export sales, Czech National Bank study shows
IMF backs Czech forex intervention
Article IV says a ‘persistent and large undershooting’ of the Czech National Bank’s inflation target would warrant a weaker koruna; governor Miroslav Singer says board is coming round to the idea
Cape Verde aims to keep euro peg credible
Maintaining the Cape Verdean escudo’s peg to the euro is the central bank’s ‘main concern’; setting policy to stabilise its international reserves and – in turn – the peg
RBI 'forfeiting monetary policy discretion' in bid to keep rupee in check
Governor Duvvuri Subbarao says India is caught in an 'impossible' trilemma, forcing the bank to maintain rates in spite of sluggish growth and ebbing inflation
Reserve Bank of India announces measures to bolster weakening rupee
In tightening move, RBI raises its Marginal Standing Facility rate to 10.25% with 'immediate effect'; currency value rebound is expected to be short-lived
No ‘significant' correlation between declining bank credit and growth, BIS paper finds
Real exchange rates and public debt, however, show a statistically significantly correlation with recovery
SNB reaffirms commitment to exchange rate limit
Thomas Jordan says Swiss economy continues to face 'major challenges'; Fritz Zurbrügg outlines efforts to control risks arising from the central bank's $475 billion foreign currency investments
Price stability ‘pivotal’ in shaping exchange rate pressures
Bank of Finland discussion paper analyses pressure on exchange rates during financial crisis; says countries that experienced high inflation beforehand were hardest hit
RBNZ could ‘scale up’ forex intervention
Reserve Bank of New Zealand governor Graeme Wheeler signals willingness to sell more NZ dollars to combat currency appreciation; house price increases put central bank in policy ‘bind’
Colombian paper trumpets transparent forex intervention
Research says ‘pre-announced and transparent’ interventions had a greater impact on the Colombian exchange rate than more discretionary or ‘dirty’ purchases
Norges Bank paper seeks to solve ‘exchange rate puzzles’
Working paper looks to research into ‘market microstructure’ to explain rapid evolution of foreign exchange markets
ECB paper explores current account reversals
Study finds that some external adjustments are more likely to trigger a current account reversal than others; this is determined by the country’s exchange rate regime
RBNZ intervenes in forex and hits bank capital
Central bank boosts mortgage lending capital requirements and sells New Zealand dollars to ‘take the tops off rallies’; economy faces low inflation but strong dollar and overheating housing market
Bank of Thailand prepares to counter rising baht
Monetary Policy Committee agrees ‘framework for exchange rate management’, but does not yield to government demands for a rate cut
Central Bank of the Philippines continues forex liberalisation drive
Relaxed rules for onshore foreign exchange transactions aim to cope with rising demand and encourage public to move informal transactions into the banking system
BoJ's Miyao sees weaker yen as key to ending deflation
Leading proponent of monetary easing highlights a change in the dollar-yen exchange rate as key to hitting Bank of Japan's 2% inflation target
Leap in renminbi trade strains PBoC exchange controls
Latest financial statistics show continued rapid rise in renminbi trade; PBoC deputy says exchange rate band may be widened again
ECB research finds exchange rate decoupled from fundamentals
Paper suggests euro exchange rate during the European sovereign debt crisis ‘danced to its own tune’, but volatility was impacted by politicians’ statements
ECB’s Cœuré damns ‘Panglossian’ view of currency war danger
ECB board member’s comments on ‘dangerously alluring’ monetary easing come a week after Bernanke claimed widespread QE is an ‘enrich thy neighbour’ policy
Fed working paper measures FOMC comms effect against theory of UIP
Paper finds 'little evidence' for a changed relationship between FOMC announcements and US interest rates since the 'onset of the zero lower bound'
Icelandic finance minister backs euro switch
Katrín Júlíusdóttir says adopting euro could help to restrain inflation and boost investment; Central Bank of Iceland publishes annual report
CNB paper formulates optimal policy for transition to euro
Working paper examines how Czech monetary policy should respond to uncertainty during the transition to the euro; finds exchange rate should be stabilised if transition is likely to be long
CNB research finds exchange rate moves dampen shocks
Working paper finds exchange rate shocks are only minor contributors to the variance of output and inflation; says koruna-euro exchange rate is a shock absorber for the economy