Inflation-targeting central banks usually publish inflation reports or monetary policy reports, but there are major differences in the frequency of publication, horizons and assumptions for projections as well as the contents in general.6 In the UK, economic developments receive broad coverage. The Bank makes projections two years ahead, but only for developments in GDP and prices. Sweden has a two-year horizon for the inflation target. The inflation report does not discuss the monetary policy stance. Instead, this is presented in the published minutes from the monetary policy meetings. The inflation report contains relatively detailed prognoses. In all inflation-targeting countries, with the exception of Iceland, the interest rate is assessed at pre-announced times. The interest rate may also be assessed at extraordinary meetings. In addition, signals about the interest rate may be given in speeches or other statements. Practice varies with regard to the publication of meeting minutes and voting. At Norges Bank, we have become more transparent in recent years about the background for the interest rate decisions. So far, we have only had positive experience with this. In statements following monetary policy meetings, press conferences, inflation reports and speeches, we present an account of aspects of economic developments that influence the Executive Board’s assessments and interest rate decisions. Everything is available on Norges Bank’s website. Interest rate decisions are based on a monetary policy strategy drawn up by the Executive Board every four months. The strategy is published as soon as it is adopted and prior to the relevant strategy period.
Philipp M Hildebrand: Developing countries and international capital markets Summary of a speech by Mr Philipp M Hildebrand, Member of the Governing Board of the Swiss National Bank, to economiesuisse, Zurich, 14 June 2005. The complete speech can be found in German on the Swiss National Bank’s website (www.snb.ch). *  *  *  After having plummeted on the back of the Asian crisis, capital flows to developing countries have risen considerably again in the last three years. In 2005, they are likely to reach the approximate level at which they stood shortly before the Asian crisis. Capital flows are channelled mostly to a few emerging markets, notably China. China’s monetary order is currently undergoing profound changes, with the country gradually liberalising capital movements. The concept of the “impossible trinity”, which was developed by the Nobel Prize winner Robert Mundell, asserts that this will inevitably lead either to a loss in monetary autonomy or to a flexibilisation of the exchange rate regime. Both trends can be clearly observed: the pressure on the fixed exchange rate on the one hand, and the rapid expansion of the monetary and credit aggregates on the other. In the longer term, China’s monetary order will probably move towards floating exchange rates. This transition will hopefully be successful. As China’s monetary policy of gradual change has so far proved its worth, it is likely to serve as an example to other developing countries.