The inflation targeting strategy has been pursued worldwide for 30 years, and has become one of the most widely used monetary policy regimes. According to this strategy the inflation target communicated to the public is the nominal anchor for inflation expectations.
At a time when many central banks conduct a monetary policy based on near-zero or negative policy rates, expectations — not only of future interest rates, but also inflation — are playing an increasingly significant role. Central bankers want to affect consumers’ inflation expectations.
The US Secretary of the Treasury Steven Mnuchin suggested in Davos that imposing a digital tax in Europe may result in customs duties imposed on European cars. In addition, the future of Asia was discussed as well as the role of central banks in the world of negative interest rates.
The global financial crisis was the catalyst for regulatory change in several areas of financial system. One of the reforms was to introduce macroprudential policy as necessarily complementing the existing microprudential supervision.
Ten years after the financial crisis, the world’s major central banks are facing the difficult task of supporting economic growth with limited room for maneuver in the area of monetary policy.
Central banks may use conventional or unconventional forms of monetary policy. Whichever is chosen by the European Central Bank (ECB) it influences all Central and Southeast European (CSE) countries.
Since 1990, Poland has adopted almost all possible exchange rate regimes, starting with a fixed rate, through a crawling peg, and finally a free floating rate.
The economy needs inflation. Striving for optimal inflation means striving for economic growth. The ECB is struggling to meet its inflation target and there is nothing more to resort to if the recession finally comes, says Prof. Klaus Adam.
The Ukrainian government should seek a new support program with the International Monetary Fund (IMF) of up to USD10bn, with a duration of up to four years, the National Bank of Ukraine (NBU) believes.
For over half a century economists talk about the imminent decline in the importance of the USD. However, there are currently no indications that this could become true anytime soon.
