IMF Working Papers

Inflation Targeting Lite

By Mark R. Stone

January 1, 2003

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Mark R. Stone Inflation Targeting Lite, (USA: International Monetary Fund, 2003) accessed October 6, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Inflation targeting lite (ITL) countries float their exchange rate and announce an inflation target, but are not able to maintain the inflation target as the foremost policy objective. This paper identifies 19 emerging market countries as practitioners of ITL. They seem to focus mainly on bringing inflation into the single digits and maintaining financial stability. ITL can be viewed as a transitional regime aimed at buying time for the implementation of the structural reforms needed for a single credible nominal anchor. The important policy challenges for an ITL central bank include whether or not to precommit to a single anchor.

Subject: Banking, Central banks, Emerging and frontier financial markets, Exchange rates, Financial markets, Foreign exchange, Inflation, Inflation targeting, Monetary policy, Open market operations, Prices

Keywords: Africa, Central bank, Currency government debt rating, Emerging and frontier financial markets, Emerging market country central banks, Exchange rates, FFIT country, FFIT regime, FXR country, FXR regime Transparency, Global, Inflation, Inflation target, Inflation targeting, ITL central bank, ITL country, Monetary policy framework, Monetary policy regime, Open market operations, Policy formulation, Price stability, WP

Publication Details

  • Pages:

    29

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2003/012

  • Stock No:

    WPIEA0122003

  • ISBN:

    9781451842920

  • ISSN:

    1018-5941