State Dependent Exchange Rate Pass Through
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State Dependent Exchange Rate Pass Through
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Author : Mr. Yan Carriere-Swallow
language : en
Publisher: International Monetary Fund
Release Date : 2023-04-28
State Dependent Exchange Rate Pass Through written by Mr. Yan Carriere-Swallow and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-04-28 with Business & Economics categories.
We estimate how the rate of pass-through from the exchange rate to domestic prices varies across states of the economy and depending on the shocks that drive fluctuations in the exchange rate. We confirm several results from the literature and uncover new facts. Drawing on the experience of a large sample of advanced and emerging market economies over the past 30 years, we document that exchange rate pass-through significantly larger during periods of high inflation and elevated uncertainty. Using a novel identification strategy, we also show that pass-through is higher when exchange rate fluctuations are driven by U.S. monetary policy.
Exchange Rate Pass Through To Inflation In
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Author : Kodjovi M. Eklou
language : en
Publisher: International Monetary Fund
Release Date : 2024-08-13
Exchange Rate Pass Through To Inflation In written by Kodjovi M. Eklou and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-08-13 with categories.
Singapore has addressed high inflation over the past years amid a tight labor market through several rounds of tightening of the exchange rate-based monetary policy. This paper estimates the exchange pass-through to inflation in Singapore with a particular focus on the role of labor market conditions. The paper first finds a strong exchange rate pass-through to inflation in Singapore, after accounting for the potential endogeneity of changes in the exchange rate. Further, it uncovers that labor market tightness dampens exchange rate pass-through and therefore could weaken monetary policy transmission. Overall, the results suggest that monetary policy should be more vigilant under a tight labor market condition. The paper then draws policy implications for taming inflation under tight labor market conditions.
Regional Economic Outlook Asia And Pacific May 2023
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Author : International Monetary Fund. Asia and Pacific Dept
language : en
Publisher: International Monetary Fund
Release Date : 2023-05
Regional Economic Outlook Asia And Pacific May 2023 written by International Monetary Fund. Asia and Pacific Dept and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-05 with Business & Economics categories.
Growth in Asia and the Pacific is projected to increase this year to 4.6 percent, up from 3.8 percent in 2022, an upgrade of 0.3 percent from the October 2022 World Economic Outlook. This means the region would contribute over 70 percent to global growth. Asia’s dynamism will be driven primarily by the recovery in China and resilient growth in India, while growth in the rest of Asia is expected to bottom out in 2023, in line with other regions. However, this dynamic outlook does not imply that policymakers in the region can afford to be complacent. The pressures from diminished global demand will weigh on the outlook. Headline inflation has been easing, but remains above targets in most countries, while core inflation has proven to be sticky. Although spillovers from turmoil in the European and US banking sectors have been limited thus far, vulnerabilities to global financial tightening and volatile market conditions, especially in the corporate and household sectors, remain elevated. Growth is expected to fall to 3.9 percent five years out, the lowest medium-term forecast in recent history, thus contributing to one of the lowest medium-term global growth forecasts since 1990.
Inflation In Emerging And Developing Economies
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Author : Jongrim Ha
language : en
Publisher: World Bank Publications
Release Date : 2019-01-03
Inflation In Emerging And Developing Economies written by Jongrim Ha and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-01-03 with Business & Economics categories.
This is the first comprehensive study in the context of EMDEs that covers, in one consistent framework, the evolution and global and domestic drivers of inflation, the role of expectations, exchange rate pass-through and policy implications. In addition, the report analyzes inflation and monetary policy related challenges in LICs. The report documents three major findings: In First, EMDE disinflation over the past four decades was to a significant degree a result of favorable external developments, pointing to the risk of rising EMDE inflation if global inflation were to increase. In particular, the decline in EMDE inflation has been supported by broad-based global disinflation amid rapid international trade and financial integration and the disruption caused by the global financial crisis. While domestic factors continue to be the main drivers of short-term movements in EMDE inflation, the role of global factors has risen by one-half between the 1970s and the 2000s. On average, global shocks, especially oil price swings and global demand shocks have accounted for more than one-quarter of domestic inflation variatio--and more in countries with stronger global linkages and greater reliance on commodity imports. In LICs, global food and energy price shocks accounted for another 12 percent of core inflation variatio--half more than in advanced economies and one-fifth more than in non-LIC EMDEs. Second, inflation expectations continue to be less well-anchored in EMDEs than in advanced economies, although a move to inflation targeting and better fiscal frameworks has helped strengthen monetary policy credibility. Lower monetary policy credibility and exchange rate flexibility have also been associated with higher pass-through of exchange rate shocks into domestic inflation in the event of global shocks, which have accounted for half of EMDE exchange rate variation. Third, in part because of poorly anchored inflation expectations, the transmission of global commodity price shocks to domestic LIC inflation (combined with unintended consequences of other government policies) can have material implications for poverty: the global food price spikes in 2010-11 tipped roughly 8 million people into poverty.
Singapore
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Author : International Monetary Fund. Asia and Pacific Dept
language : en
Publisher: International Monetary Fund
Release Date : 2024-07-31
Singapore written by International Monetary Fund. Asia and Pacific Dept and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-07-31 with categories.
Singapore: Selected Issues
Non Linear Exchange Rate Pass Through In Emerging Markets
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Author : Francesca G Caselli
language : en
Publisher: International Monetary Fund
Release Date : 2016-01-05
Non Linear Exchange Rate Pass Through In Emerging Markets written by Francesca G Caselli and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-01-05 with Business & Economics categories.
This paper estimates exchange rate pass-through to consumer prices in emerging markets focusing on non-linearities and asymmetries. We document non-linearities and asymmetries in the transmission of exchange rate fluctuations to prices using local projection techniques to obtain state dependent impulse responses in a panel of 28 emerging markets. We find significant evidence of non-linearities during episodes of depreciation greater than 10 and 20 percent. More specifically, we find that, after one month, the exchange rate pass-through coefficient is equal to 18 and 25 percent respectively, compared to a coefficient of 6 percent in the linear case. We also investigate the role of temporary vs. permanent shocks and the adoption of an inflation targeting regime in the transmission from exchange rate movements to prices. We perform a set of robustness checks, addressing the presence of outliers and potential endogeneity concerns.
Kenya
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Author : International Monetary Fund. African Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2024-01-17
Kenya written by International Monetary Fund. African Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-01-17 with Business & Economics categories.
Kenya: Selected Issues
Effect Of Exchange Rate Movements On Inflation In Sub Saharan Africa
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Author : Laurent Kemoe
language : en
Publisher: International Monetary Fund
Release Date : 2024-03-15
Effect Of Exchange Rate Movements On Inflation In Sub Saharan Africa written by Laurent Kemoe and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2024-03-15 with Business & Economics categories.
This paper provides new evidence on the exchange rate passthrough to domestic inflation in Sub-Saharan Africa (SSA) using both bilateral US dollar exchange rate and the nominal effective exchange rate (NEER), and monthly data. We find that depreciations cause sizable increases in domestic inflation. The passthrough in SSA is higher than in other regions and its magnitude depends on the exchange rate regime, type of exchange rate (bilateral versus NEER), natural resource endowment and domestic market competitiveness. The passthrough is found to be disproportionately larger and more persistent for large depreciation shocks, and for exchange rate changes that are more persistent. We also find evidence of asymmetry, with passthrough eight times stronger during depreciations than appreciations. Additional findings suggest that improved monetary policy effectiveness is an important driver of our observed declining estimates of exchange rate passthrough over time, supporting the long-standing view that strengthening monetary policy frameworks and credibility helps mitigate the impact of depreciations on inflation.
Inflation Dynamics In South Africa
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Author : Eliphas Ndou
language : en
Publisher: Springer
Release Date : 2017-02-21
Inflation Dynamics In South Africa written by Eliphas Ndou and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-02-21 with Business & Economics categories.
This book offers a comprehensive empirical analysis of South African inflation dynamics, using a variety of techniques including counterfactual analysis. The authors elaborate the roles in inflation of thresholds, nonlinearities and asymmetries introduced by economic conditions such as the size of exchange rate changes and volatility, GDP growth, inflation, output gap, credit growth, sovereign spreads and fiscal policy, providing new policy evidence on the impact of these. Ndou and Gumata apply techniques to determine the prevalence of updating inflation expectations, and reconsider the propagation effects of a number of inflation risk factors. Asking to what extent the evidence points to a need to enforce price stability and the anchoring of inflation expectation, the book fills existing gaps in South African Policy, and maintains a clear argument that price stability is consistent with the 3 to 6 per cent inflation target range, and that threshold application should form an important aspect of policy analysis in periods of macroeconomic uncertainty. As such, the book serves as an excellent reference text for academic and policy discussions alike.
Russian Federation
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Author : International Monetary Fund. European Dept.
language : en
Publisher: International Monetary Fund
Release Date : 2015-08-03
Russian Federation written by International Monetary Fund. European Dept. and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-08-03 with Business & Economics categories.
This Selected Issues paper analyzes Russia’s fiscal framework and the oil-price shock. Russia has relied heavily on its abundant natural resource wealth to finance fiscal deficits since the global financial crisis in 2008–09. The pace of adjustment of the oil-price benchmark could be increased by including future prices in its calculation. Although converting oil revenues using a backward-looking average of the exchange rate could also lead to a more rapid fiscal adjustment, it also implies additional technical and communication challenges. In addition, the fiscal anchor could be more ambitious to safeguard intergenerational equity. Expressing the fiscal rule in terms of a minimum “structural" balance could promote greater savings.