Capital Flows in a Transitional Economy and the Sterilization Dilemma: The Hungarian Case
Summary:
This paper compares Hungary’s experience with sterilization with that of other capital inflow episodes. The study focuses on the short-run impact of sterilization on monetary policy. The empirical data indicate that sterilized interventions by the National Bank of Hungary (NBH) were not significant until mid-1994, sometime after the return to power of the former Communist leaders. Thus, in the second half of 1994, the NBH began to demonstrate more firmly its independence by tightening monetary policy. By the beginning of 1995, the direction of fiscal policy had begun to show consonance with the overall aims of monetary policy.
Series:
Working Paper No. 1996/086
Subject:
Balance of payments Capital flows Central banks Demand for money Foreign exchange Monetary base Money Real exchange rates Sterilization
English
Publication Date:
August 1, 1996
ISBN/ISSN:
9781451850833/1018-5941
Stock No:
WPIEA0861996
Pages:
36
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