Exchange Rate Pass Through to Prices in Maldives
May 1, 2012
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Summary
This study examines the degree of exchange rate pass through (EPRT) into producer and consumer prices in Maldives. 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. The nonparametric estimation indicates that ERPT to consumer prices is very high, both in absolute terms and relative to other countries. The dynamics of ERPT as derived from the empirical estimation indicate that ERPT to consumer and producer prices is significant but not complete, and that the impact of exchange rate changes persists into the second year.
Subject: 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
Pages:
25
Volume:
2012
DOI:
Issue:
126
Series:
Working Paper No. 2012/126
Stock No:
WPIEA2012126
ISBN:
9781475503555
ISSN:
1018-5941
