Waiting for the right moment to cut interest rates, India's central bank faces a problem over public perceptions that price rises will return to double-digits even though forecasts show retail inflation fell to a record low of 4.5 percent last month.
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The Federal Reserve's vow to keep interest rates near zero for a "considerable time" is likely to remain in place for now, with the U.S. central bank set to take a slow and steady approach to its first rate rise in a decade.The pledge will be up for debate again when policymakers meet next week, with a strong jobs report bolstering the case of officials who want to remove it.
Mainland listed shares in China's big five banks jumped on Monday but later pared gains, after the country issued draft regulations to introduce a bank deposit insurance scheme for the first time.
The Federal Reserve's latest market proposal could help it smoothly raise interest rates and bring far more banks into direct contact with the U.S. central bank in a way that another tool, unveiled last year, could not.
U.S. consumer spending rose modestly in October and a measure of business spending plans fell for a second straight month, suggesting some slowing in the pace of economic growth.
The central banks are finding it difficult to boost growth by increasing domestic demand and hence the need to depend upon foreign demand. The progressive rate cuts and monetary easing measures have led to massive falls in these currencies thereby helping these countries to increase exports.
Bank of Japan Governor Haruhiko Kuroda on Tuesday stressed the bank's readiness to expand stimulus further to meet its price goal, standing firm in the face of criticism that last month's monetary easing has accelerated unwelcome falls in the currency.
If the world's biggest central banks were actually coordinating a global monetary policy, they could scarcely do a better job of convincing financial markets right now.
China's leadership and central bank are ready to cut interest rates again and also loosen lending restrictions, concerned that falling prices could trigger a surge in debt defaults, business failures and job losses, said sources involved in policy-making.
Market expectations that U.S. interest rates will start to lift off sometime in mid-2015 are reasonable, New York Federal Reserve President William Dudley said on Thursday.
A large group of professional forecasters cut their outlook for euro zone inflation and growth, underlining a trend that could prompt the European Central Bank to take more policy action to kick-start the region's flagging economy.
The Fed should fight low inflation as vigorously as it would a too rapid run-up in prices or risk the same sort of prolonged slow growth plaguing Japan and Europe, Boston Federal Reserve bank president Eric Rosengren said on Monday.
Analysts expect that interest rates would not remain stable next year due to heated property markets in Sydney and Melbourne and rising unemployment rates.
India's Finance Minister Arun Jaitley favors a cut in interest rates to trigger demand in the construction sector, a newspaper report said on Saturday, but the central bank has signal it will not ease policy until it is confident of lower inflation.
If the European Central Bank really wants to kick-start the euro zone economy, it should ensure the bloc's banks are up to the task of lending.
