Inflation Targeting in the Context of IMF-Supported Adjustment Programs

 
Author/Editor: Bléjer, Mario I. ; Leone, Alfredo Mario ; Schwartz, Gerd ; Rabanal, Pau
 
Publication Date: March 01, 2001
 
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Summary: This paper argues that the IMF's traditional monetary conditionality-a ceiling on net domestic assets of the central bank and a floor on its net international reserves-should be adapted in IMF-supported adjustment programs with countries which have a framework of explicit inflation targets for the implementation of monetary policy. This adaptation should aim at enhancing correspondence and consistency between the monetary objectives of the central bank and the targets established under the IMF-supported adjustment program, as well as between the different instruments used to achieve the policy objectives and targets. The paper reviews various general options in this regard, and, using the case of Brazil as an example, demonstrates how these options may be implemented in practice.
 
Series: Working Paper No. 01/31
Subject(s): Inflation targeting | Brazil | Monetary policy | Conditionality | Fund-supported adjustment programs

Author's Keyword(s): Inflation targeting | monetary policy | monetary policy rules | Brazil
 
English
Publication Date: March 01, 2001
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA0312001 Pages: 24
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