The risk of a wage-price spiral in 2021 remains low

2021 ◽  
Keyword(s):  
Commodity Prices ◽  
Central Banks ◽  
Content Type ◽  
Bank Of Japan

Significance The Fed, in common with the ECB and Bank of Japan (BoJ), remains commited to ultra-loose policy this year. All three seem relaxed at the prospect of inflation running above the targeted level this year. Impacts Commodity prices could rise further during 2021 but there is little prospect of them reaching record levels. At this stage, the key risk for central banks is that they tighten too early and thrust economies back to a low-inflation, low-growth trap. A steady rise in prices will reduce the value of debts and allow the banks to normalise policy, but fears of an unsteady rise will persist.

Japan will stay the course on monetary easing

2018 ◽  
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Central Banks ◽  
Quantitative Easing ◽  
Content Type ◽  
Bank Of Japan ◽  
Target Date ◽  
Low Levels ◽  
Global Economic Growth ◽  
First Time

Subject Monetary policy in Japan. Significance The monetary policy board of the Bank of Japan (BoJ) at its last meeting abandoned its prediction of when the nation will reach its 2% inflation target, the first time it has omitted a target date since Governor Haruhiko Kuroda introduced his policy of radical monetary easing five years ago. Impacts Japan’s interest rates will remain at historically low levels for at least two more years. The yen will remain relatively weak as other countries’ central banks end their quantitative easing programmes. A weak currency plus widespread global economic growth will create strong demand for Japanese exports.

Central banks will be slow to drop targeting prices

2019 ◽  
Keyword(s):  
Inflation Targeting ◽  
Central Banks ◽  
Target Range ◽  
Price Inflation ◽  
Content Type ◽  
Policy Review ◽  
The Us ◽  
Bank Of Japan ◽  
National Bank ◽  
Do So

Subject Inflation targeting. Significance The effectiveness of the ultra-loose monetary policy of the US Federal Reserve (Fed), the Bank of Japan (BoJ) and the ECB is increasingly being questioned. Over the last ten years, despite very low and even negative policy rates in Japan and the euro-area, consumer price inflation has run well below 2%, the benchmark for the three central banks’ price stability objective. There are calls for central banks to shift from a strict 2% target, but the three central banks are wary to do so. Impacts The Fed will release the results of its policy review in the first half of 2020, but has no intention of moving from its 2% price target. The ECB president intends to hold a similar review, but the national bank governors do not support changing the inflation target. The adoption of a target range around 2% would give central banks maximum flexibility to adapt to a changing inflationary environment. Medium-to-longer-term discussions will consider monetary options beyond price targeting.

Conflicting pressures shape Africa's monetary policy

2015 ◽  
Keyword(s):  
Commodity Prices ◽  
Central Banks ◽  
Sub Saharan Africa ◽  
Political Will ◽  
Financial Flows ◽  
Content Type ◽  
State Revenue ◽  
Sub Saharan ◽  
Oil Sector ◽  
Wage Increases

Significance Other central banks in sub-Saharan Africa (SSA) have been increasing rates in a bid to contain inflation and shore up currencies. However, further increases risk dampening growth, which is already under pressure from softening commodity prices. Impacts There is limited political will to address fiscal leakage by curbing financial flows. The effect of public sector wage increases on inflation and state revenues will be greatest in countries facing elections. Nigeria's relatively diversified economy opens more opportunities to diversify state revenue flows, compared to Angola. However, opaque oil sector governance and difficulties in mobilising non-oil tax revenues will prolong Nigeria's fiscal strains.

Risk assessment of mining projects in Ghana

2017 ◽  
Vol 23 (1) ◽  
pp. 22-38 ◽  
Author(s):  
Charles Teye Amoatey ◽  
Samuel Famiyeh ◽  
Peter Andoh
Keyword(s):  
Risk Factors ◽  
Risk Assessment ◽  
Academic Research ◽  
Mining Industry ◽  
Commodity Prices ◽  
Mitigation Measures ◽  
Content Type ◽  
Management Culture ◽  
Mining Project ◽  
Mining Projects

Purpose The purpose of this paper is to assess the critical risk factors affecting mining projects in Ghana. Design/methodology/approach A purposive sampling approach was used in selecting the respondents for the study. These were practitioners working on mining projects in Ghana. Findings The study identified 22 risk factors contributing to mining project failure in Ghana. The five most critical mining project risk factors based on both probability of occurrence and impact were unstable commodity prices, inflation/exchange rate, land degradation, high cost of living and government bureaucracy for obtaining licenses. Mitigation measures for addressing the identified risk factors were identified. Research limitations/implications This paper is limited to data collected from practitioners working on mining projects. Due to geographic and logistical constraints, the study did not include the perception of local communities in quantifying the risk factors. Practical implications This paper has documented the critical risk factor affecting the mining industry in Ghana. Though the identified risk types are also prevalent in other sectors of the construction industry, the key findings of this paper emphasize the need for a comprehensive risk management culture in the mining sector. From an academic research perspective, the paper contributes to a conceptual risk assessment framework. Originality/value The information gathered through this research can be utilized in identifying and understanding risks during the early stages of mining project implementation.

Gas prices expose Europe’s energy vulnerability

2021 ◽  
Keyword(s):  
Natural Gas ◽  
Central Banks ◽  
Liquefied Natural Gas ◽  
Electricity Price ◽  
Energy Prices ◽  
Content Type ◽  
Indigenous Production ◽  
Europe Today ◽  
The Cost

Significance The cost of gas-fired generation sets the electricity price in much of Europe today. Falling indigenous production has left Europe reliant on gas imports and exposed it to global liquefied natural gas (LNG) prices set by fast-recovering China. This has left retail-only electricity suppliers vulnerable and increases the risk that falling disposable incomes will undermine post-pandemic recovery. Impacts EU carbon allowance prices will stay strong. Higher energy prices will stoke inflation amid a fragile recovery, posing a dilemma for central banks. Rising gas prices have had ancillary but potentially alarming impacts as some fertiliser and CO2 producers have shut in production.

Critical minerals demand will boost Canadian mining

2021 ◽  
Keyword(s):  
Supply Chain ◽  
Rare Earth ◽  
Electric Vehicle ◽  
Carbon Emissions ◽  
High Performance ◽  
Commodity Prices ◽  
Alternative Source ◽  
Content Type ◽  
The Us ◽  
Critical Minerals

Significance Although low commodity prices deterred investment in recent years, this is changing as the market rallies. The creation of a regional electric vehicle (EV) supply chain straddling the Canada-US border has the potential to transform the Canadian mining sector while loosening China’s grip on the minerals used in high-performance batteries. Impacts Canada is the world’s eighth-largest cobalt producer and has significant copper, graphite and rare earth deposits. Fortune Minerals, which is developing a cobalt mine in Northwest Territories, has held funding talks with the US Export/Import Bank. First Cobalt is building North America’s only cobalt refinery to give battery makers an alternative source to the DRC. Several of the country’s mines are using cutting-edge technologies to reduce their carbon emissions.

Monetary Policy and Oil Prices

2011 ◽  
Vol 11 (3) ◽  
pp. 1850232
Author(s):  
Mehdi S. Monadjemi
Keyword(s):  
Monetary Policy ◽  
International Trade ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Commodity Prices ◽  
Oil Prices ◽  
Central Banks ◽  
Trade Shocks ◽  
The Exchange Rate

Because of volatility, commodity prices are excluded from the CPI when inflation targeting is exercised. Rising commodity prices contribute to inflation but central banks show no reaction since the CPI does not register rise in prices. Frankel (2006) argues that monetary policy should consider the price of important export commodities such as oil, in oil exporting countries. He maintains that by doing so, central banks are able to benefit from the fluctuations of the exchange rate in the presence of a negative international trade shocks. Central banks cannot benefit from the fluctuation of the exchange rate if inflation targeting is the strategy for conducting monetary policy.

Risk culture and banking supervision

2017 ◽  
Vol 25 (2) ◽  
pp. 209-226 ◽  
Author(s):  
Alessandro Carretta ◽  
Vincenzo Farina ◽  
Paola Schwizer
Keyword(s):  
Cultural Differences ◽  
European Central Bank ◽  
Design Methodology ◽  
Central Banks ◽  
Banking Union ◽  
Banking Supervision ◽  
Text Data ◽  
Content Type ◽  
European Central ◽  
Risk Culture

Purpose This paper aims to analyzing the main risk culture traits of a sample of Central Banks and Supervisory Authorities in Europe as well as of the European Central Bank (ECB). Design/methodology/approach Risk culture is measured through text data processing of the official discourses made by the head Supervisory Authorities, during the years from 1999 to 2012. Findings Results highlight heterogeneous but converging risk cultures for European Union (EU) supervisors and the presence of a “distance” between these cultures and the risk culture of the ECB. Originality/value The paper points out that cultural differences, especially in presence of credit markets still characterized by poor integration, could create unwanted distortion effects during the initial stages of the Banking Union.

Policy concerns will keep Turkish lira under strain

2021 ◽  
Keyword(s):  
Central Banks ◽  
Fourth Quarter ◽  
Economic Recovery ◽  
Corporate Debt ◽  
Economic Stability ◽  
Lower Growth ◽  
Content Type ◽  
Risk Appetite ◽  
Service Sectors ◽  
Turkish Lira

Significance Mounting concerns that a faster-than-expected global economic recovery from the COVID-19 pandemic will spur inflation, forcing the leading central banks to signal an earlier-than-expected withdrawal of monetary stimulus, have contributed to renewed pressure on the lira. Although Turkey is less vulnerable than it was in 2013, it is still acutely susceptible to a sharp deterioration in risk appetite. Impacts Policy tightening in the fourth quarter will probably be reflected in lower growth in the current and later quarters. Provided the coronavirus threat fades and vaccination proceeds apace, the prospects for tourism and some service sectors will improve. Base effects and financial and economic stability may allow growth of 3-5% in 2021, despite lira volatility and high corporate debt levels.

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