BIS chief sees moderate second-round inflation effects from Iran war so far

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)

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