{
  "title": "Exchange Rate Volatility and Pass-Through to Inflation in South Africa",
  "publication": "IMF Working Papers, December 13, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2019/12/13/exchange-rate-volatility-and-pass-through-to-inflation-in-south-africa-48822",
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  "summary": "Does the South African rand’s relatively large volatility affect inflation? To shed some light on this question, a standard estimation technique of exchange rate pass-through to inflation is extended to incorporate exchange rate volatility.",
  "sections": [
    {
      "heading": "Overview and research question",
      "content": "- Title: Exchange Rate Volatility and Pass-Through to Inflation in South Africa\n- Author: Ken Miyajima\n- Publication date: December 13, 2019\n- Series: Working Paper No. 2019/277\n- Issue: 277\n- Volume: 2019\n- Pages: 27\n- DOI: https://doi.org/10.5089/9781513521572.001\n- ISBN: 9781513521572\n- ISSN: 1018-5941\n- Publication type: IMF Working Papers"
    },
    {
      "heading": "Core findings",
      "content": "- The study extends a standard estimation technique of exchange rate pass-through (ERPT) to inflation by incorporating exchange rate volatility.\n- Estimated results suggest that higher exchange rate volatility tends to increase core inflation.\n- The impact of exchange rate volatility on core inflation is described as relatively limited in South Africa."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- The findings lend support to the policy of allowing the rand to float freely.\n- Allowing the rand to float supports its role as a shock absorber.\n- The results are presented as consistent with South Africa’s successful inflation targeting regime."
    },
    {
      "heading": "Subjects and keywords (as listed)",
      "content": "- Subjects: Depreciation, Exchange rate pass-through, Exchange rates, Foreign exchange, Inflation, National accounts, Output gap, Prices, Production\n- Keywords: Africa, core inflation, Depreciation, ERPT terms, Exchange rate pass-through, exchange rate variable, exchange rate volatility, Exchange rates, food price inflation, fuel price inflation, Global, inflation, NEER depreciation, Output gap, price, rand volatility, volatility data, WP\n\nSource: IMF Working Paper — Ken Miyajima, \"Exchange Rate Volatility and Pass-Through to Inflation in South Africa\", Working Paper No. 2019/277 (December 13, 2019).\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/12/13/exchange-rate-volatility-and-pass-through-to-inflation-in-south-africa-48822"
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    "Authors: Ken Miyajima",
    "Published: December 13, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513521572.001",
    "Title: Exchange Rate Volatility and Pass-Through to Inflation in South Africa",
    "Author: Ken Miyajima",
    "Publication date: December 13, 2019",
    "Series: Working Paper No. 2019/277",
    "Issue: 277",
    "Volume: 2019",
    "Pages: 27",
    "DOI: https://doi.org/10.5089/9781513521572.001",
    "ISBN: 9781513521572",
    "ISSN: 1018-5941",
    "Publication type: IMF Working Papers",
    "The study extends a standard estimation technique of exchange rate pass-through (ERPT) to inflation by incorporating exchange rate volatility.",
    "Estimated results suggest that higher exchange rate volatility tends to increase core inflation.",
    "The impact of exchange rate volatility on core inflation is described as relatively limited in South Africa.",
    "The findings lend support to the policy of allowing the rand to float freely.",
    "Allowing the rand to float supports its role as a shock absorber.",
    "The results are presented as consistent with South Africa’s successful inflation targeting regime.",
    "Subjects: Depreciation, Exchange rate pass-through, Exchange rates, Foreign exchange, Inflation, National accounts, Output gap, Prices, Production",
    "Keywords: Africa, core inflation, Depreciation, ERPT terms, Exchange rate pass-through, exchange rate variable, exchange rate volatility, Exchange rates, food price inflation, fuel price inflation, Global, inflation, NEER depreciation, Output gap, price, rand volatility, volatility data, WP",
    "**Working Paper**"
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