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Inflation Targeting in the Context of IMF-Supported Adjustment Programs
Author:
Mr. Gerd Schwartz
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Mr. Pau Rabanal
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Mr. Mario I. Bléjer
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Mr. Alfredo Mario Leone
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Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 031
Language:
English
Publication Date:
01 Mar 2001
DOI:
https://doi.org/10.5089/9781451845020.001
ISBN:
9781451845020
ISSN:
1018-5941
Pages:
24
Keywords:
WP; monetary policy; Fund; Inflation Targeting; Monetary Policy Rules; Brazil; inflation targeting framework; NIR floor; stance vis-à-vis; Fund program; NIR baseline; NIR loss; Inflation; Monetary stance; Monetary policy frameworks; Monetary base
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund