Monetary Transmission Mechanisms in Belarus

Author/Editor:

Rodolfo Maino ; Balázs Horváth

Publication Date:

November 1, 2006

Electronic Access:

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Summary:

We explore monetary policy transmission by estimating VAR impulse response functions to illustrate the Belarusian economy's response to unexpected changes in policy and exogenous variables. We find a significant exchange rate pass-through to prices, and interest rate policy following, rather than leading, financial market developments. Our estimated monetary policy reaction function shows the central bank striking a balance between real exchange rate stability and containing inflation. We discuss dollarization, administrative interventions, and other features complicating monetary policy transmission, review specific constraints and vulnerabilities, and conclude with observations on possible measures that could raise the effectiveness of monetary policy in Belarus.

Series:

Working Paper No. 06/246

Subject:

English

Publication Date:

November 1, 2006

ISBN/ISSN:

9781451865066/1018-5941

Stock No:

WPIEA2006246

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

22

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