Inflation
Kganyago reiterates ‘hiking cycle’ as Sarb raises rates
Risks noted at previous MPC meeting are now materialising; continued volatility expected in the exchange rate
Turkish inflation seen returning to 5% in 2018
Latest projections from the Central Bank of the Republic of Turkey suggest headline inflation will only return to target in 2018, after it overshot October forecasts, rising to 8.8%
Reserve accumulation can be inflationary, ECB paper says
Working paper examines the allocation of special drawing rights in 2009 to separate out the inflationary effects stemming from an increase in the monetary base and moral hazard
Tobacco prices ‘insufficient’ to offset food and energy, says Tonga central bank
Headline inflation in Tonga rose to -1.2% in December, but in its inflation report for November, the central bank warns price increases will likely remain low
BoE’s Weale sees shorter working week adding to inflation
Various measures suggest UK workers will gradually cut back on the number of hours they work over the next few years, adding to unit labour costs, external MPC member says
Economists point to external woes as Central Bank of Brazil holds rates
Monetary policy committee leaves interest rate at 14.25% in surprise move; politics and fiscal policy making life harder for central bank, analysts suggest
Observers cast doubt on first Venezuelan inflation figures in a year
Central bank report puts annual inflation at 141% at end of September, after a year without publishing the data; some consider the figure to be too conservative
Carney says UK rate hike still some way off
Continued weakness in key indicators begins to puzzle policy-makers as Carney suggests there is room for the MPC to wait longer; CPI and core inflation on the rise
IMF cuts global growth forecast on back of EM challenges
Maurice Obstfeld says emerging markets and developing economies account for more than two-thirds of revisions; largest changes come in Brazil, where the MPC meets today
New York Fed president keeping eye on expectations
William Dudley expects inflation expectations to increase if the economy keeps growing at an above-trend pace, but any deviation could be cause for concern
Jamaican report says inflation risks balanced for 2016
Latest forecasts suggest inflation will rise to lower end of Bank of Jamaica’s target range in coming months; downside risks include reversal in food prices
BoJ paper: inflation expectations do not match target
Study of ‘dissonance’ in forecasts between economic agents and the central bank finds people only believe the BoJ will hit its target in the short to medium term – after that, inflation drops
Volatility fails to shake outlook as BoE holds rates steady
Latest MPC minutes are largely preoccupied with discussion of international developments, but falling oil prices and market volatility do not herald major change in stance
BoE paper seeks to improve forecasts with adaptive model
Using an adaptive model in conjunction with heavy-tailed t-distributions allows authors to deliver ‘substantial improvements’ in forecasting inflation
Brazilian paper charts impact of inflation signal on expectations
Agents update forecasts immediately after new information is released and the impact of new information is dependent on ‘precision’, a working paper suggests
Sarb deputy governor sees growing inflation risks ahead of MPC meeting
South African Reserve Bank policy-makers must assess ‘very carefully’ whether its stance remains appropriate, Mminele says; MPC meets January 21
Lockhart to watch inflation closely over the coming year
‘Mildly not wildly’: Atlanta Fed president remains optimistic for 2016 outlook, adding rate hikes not likely to occur at every meeting
Bank of England paper explores exchange rate pass-through using ‘big data’
Author finds the pass-through to import prices varies depending on the size of the exchange rate movement at the micro level, but it is a different story at the macro level
Risk that US public lowers inflation expectations, Chicago Fed president warns
The Federal Reserve’s undershooting of its inflation target in recent years may lower the inflation expectations of the American public, making future monetary policy harder, Evans warns
Room for monetary policy stimulus has ‘narrowed’ in many EMs, World Bank report warns
Little room left to use monetary or fiscal stimulus in event of growth shock in some countries, report says, pointing to role for structural reform
IMF paper sees Indian food prices shaping inflation dynamics
Working paper suggests food inflation will continue to outpace non-food inflation in the coming years, while potentially contributing 1.25 percentage points annually to headline figure
Venezuelan president cuts congress out of key central bank matters
President ‘shields’ central bank from opposition interference, according to one observer, with changes effective on eve of national assembly meeting
Riksbank prepared to ‘instantly intervene’ in krona
Executive board hands governor and first deputy the power to determine interventions to hold down the value of the krona, at unscheduled monetary policy meeting
Czech Republic chooses not to set target date for euro adoption
Government decision follows central bank and ministry of finance advice; authorities cite need for greater real economic convergence as a ‘main barrier’ to adoption