ISTANBUL, Oct 9 (Reuters) – Bank for International Settlements General Manager Pablo Hernandez de Cos said on Friday that the surge in energy prices from the Iran war has had moderate second-round inflation effects so far.
Hernandez de Cos made the comments in an on-stage discussion with Turkish Central Bank Governor Fatih Karahan as part of the Istanbul Economic Forum.
• The Middle East conflict represents a negative supply shock, he said
• Central banks globally have responded to shocks at varying speeds, with some reacting quickly where domestic demand conditions justified it and others following more gradually, he said
• Hernandez de Cos said permanent adaptation of analytical tools is necessary, and has to play a very important role of how central banks behave in terms of the reaction function
• Credibility — underpinned by clear mandates, central bank independence and accountability — remains essential for both monetary policy and financial stability, he said
• He said macro-prudential and monetary policy objectives are broadly compatible, though trade-offs can emerge and have been managed “in a relatively good way” in the past
(Reporting by Ezgi Erkoyun and Nevzat Devranoglu; Editing by Daren Butler and Xevi Fontdegloria)
Comments