## Exchange Rate Pass Through to Prices in Maldives

_IMF Working Papers, May 1, 2012_

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**Canonical URL:** [Exchange Rate Pass Through to Prices in Maldives](https://www.imf.org/en/publications/wp/issues/2016/12/31/exchange-rate-pass-through-to-prices-in-maldives-25919)

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## Bibliographic details
- Authors: Iyabo Masha, Chanho Park
- Published: May 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475503555.001

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### Summary findings
- ERPT to consumer prices is estimated to be very high, both in absolute terms and relative to other countries.
- ERPT to consumer and producer prices is significant but not complete.
- The impact of exchange rate changes persists into the second year.

### Methodology
- ERPT to consumer prices is first estimated using a nonparametric approach.
- A recursive vector autoregression is then used to model both consumer and producer price changes.

### Policy-relevant implications
- High ERPT to consumer prices implies exchange rate movements have large effects on domestic inflation.
- Persistence of ERPT effects into the second year suggests that exchange rate shocks can have medium-term inflationary consequences, relevant for monetary policy and inflation forecasting.

### Keywords and subjects (as listed)
- Consumer price indexes
- Exchange rate adjustments
- Exchange rate pass-through
- Exchange rates
- Foreign exchange
- Inflation
- Prices
- Keywords: consumer price, Consumer price indexes, CPI coefficient, CPI data, Exchange Rate, Exchange rate adjustments, Exchange rate pass-through, exchange rate shock, exchange rate system, Exchange rates, forecasting inflation, Global, Inflation, inflation outcome, Maldives, nontradable goods price, oil price change, output gap, PPI price, price determination, price development, rufiyaa exchange rate, WP

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/exchange-rate-pass-through-to-prices-in-maldives-25919_