Monetary policy exchange rate targeting

Second, I investigate whether exchange rate volatility is different in countries with an inflation targeting regime than in countries with alternative monetary policy arrangements. And third, I discuss whether the exchange rate should play a role in determining the monetary policy stance under inflation targeting. output and inflation with a lag, good monetary policy involves “forward -looking” forecasts of output and inflation Many countries use a short -term interest rate as their main monetary policy instrument Some countries use the exchange rate as their main policy instrument but do not have a formal exchange rate target (e.g., Singapore) nominal exchange rate and the terms of trade. Hence, a policy of strict domestic inflation targeting, which in our framework can achieve a simultaneous stabilization of the output gap and domestic inflation, implies a substantially greater volatility in the nominal exchange rate and 4.

Has inflation targeting (IT) conferred benefits in terms of economic growth on countries that followed this particular monetary policy strategy during the crisis  South African monetary policy authorities have in several occasions managed to bring the inflation rate within the target band of 3-6% after adopting inflation  The exchange rate targeting regime means that the central bank pegs the value of the national currency to the exchange rate (basket of currencies) of the  The author provides a non-technical explanation of the role played by the exchange rate in Canada's inflation-targeting monetary policy. He reviews the 

In many African countries, discussion of monetary policy choices is framed around the transition from monetary aggregate targeting to inflation targeting, in the 

In this paper, monetary authorities are assumed to precommit to either a policy of domestic producer price stabilization or a unilateral exchange rate peg. In contrast to an exchange rate target, inflation targeting enables monetary policy to focus on domestic considerations and to respond to shocks to the domestic  In many African countries, discussion of monetary policy choices is framed around the transition from monetary aggregate targeting to inflation targeting, in the  We analyze coordination of monetary and exchange rate policy in a two-sector model of a small open economy featuring imperfect substitution between domestic 

Exchange-rate targeting vs. inflation targeting. “Current Account Dynamics and Monetary Policy” (with Andrea Ferrero, Federal Reserve Bank of New York, and 

output and inflation with a lag, good monetary policy involves “forward -looking” forecasts of output and inflation Many countries use a short -term interest rate as their main monetary policy instrument Some countries use the exchange rate as their main policy instrument but do not have a formal exchange rate target (e.g., Singapore)

After strong currency crisis, in January 1999, Brazil implemented flexible exchange rate regime combined with inflation targeting. Some economists believe that 

One the hand, the combination of an exchange rate target path with a certain level of domestic interest rates (which is identical with a certain value of a monetary  Consequently, it has been asked what could replace a fixed exchange rate as the anchor of mone- tary policy. The setting of formal inflation targets for monetary  28 Jun 2019 A higher ratio of public debt to GDP is associated with lower policy interest rates in advanced economies. In emerging economies under non- 

27 Dec 2019 A credible monetary policy is required to use the policy rate only to target inflation and not to make any commitment regarding the exchange 

Has inflation targeting (IT) conferred benefits in terms of economic growth on countries that followed this particular monetary policy strategy during the crisis  South African monetary policy authorities have in several occasions managed to bring the inflation rate within the target band of 3-6% after adopting inflation  The exchange rate targeting regime means that the central bank pegs the value of the national currency to the exchange rate (basket of currencies) of the  The author provides a non-technical explanation of the role played by the exchange rate in Canada's inflation-targeting monetary policy. He reviews the 

2 May 2019 The vast majority of EME central banks today operate under an explicit inflation targeting regime with flexible exchange rates, while only a few  Monetary policy involves setting the interest rate on overnight loans in the money market policy, the Bank has a duty to contribute to the stability of the currency, full To achieve these statutory objectives, the Bank has an 'inflation target' and   circulated under the title “Pegging the Exchange Rate to Gain Monetary Policy Credibility”. We would like to thank seminar participants at the Federal Reserve  It is argued that monetary policy actions in order to keep the inflation rate stable in response to an inflation shock will also offset the impact on the exchange rate  A restrictive (expansionary) monetary policy will thus generate a massive capital inflow (outflow), producing an instantaneous nominal exchange rate appreciation