Exchange Rate Responses to Inflation in Bangladesh
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Summary:
This paper investigates the exchange rate responses to inflation in Bangladesh during the period from 1972-73 to 1999. Both annual and monthly data are used in the investigation. The results suggest that past consumer price inflation generally led to currency devaluation, measured as a decline in the value of the currency in terms of the trade-weighted nominal effective exchange rate. The effect of inflation on devaluation, however, became weaker following the financial reforms undertaken in the early 1980s. The effect of devaluation on inflation was not significant, and this result remained robust throughout the sample period.
Series:
Working Paper No. 2002/166
Subject:
Exchange rate arrangements Exchange rates Inflation Monetary base Real exchange rates
English
Publication Date:
October 1, 2002
ISBN/ISSN:
9781451858112/1018-5941
Stock No:
WPIEA1662002
Pages:
34
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