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Exchange Rate Policy and Monetary Strategy Options in the Philippines: The Search for Stability and Sustainability
Author:
Aerdt G. F. J. Houben null

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Series:
IMF Policy Discussion Papers
Volume/Issue:
Volume 1997: Issue 004
Language:
English
Publication Date:
01 May 1997
DOI:
https://doi.org/10.5089/9781451973341.003
ISBN:
9781451973341
ISSN:
1564-5193
Pages:
36
Keywords:
PDP; Policy vis-a-vis; U.S. dollar; exchange rate anchor; exchange rate rigidity; stability vis-a-vis; nominal exchange rate; exchange rate commitment; monetary policy independence; capital goods; intervention policy; policy mix; Exchange rates; Exchange rate policy; Inflation; Monetary base; Inflation targeting; Global
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This Policy Discussion Paper should not be reported as representing the views of the IMF. The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Policy Discussion Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
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This paper evaluates the Philippines’ experience with different exchange regimes since 1970. It argues that the shift to a flexible regime was crucial to restoring external viability and generating an export-led economic take-off, but that mixed performance in meeting money targets and asymmetric policy reactions to exchange rate pressures have resulted in an uneven inflation performance. Since adoption of a firm nominal anchor for monetary policy would contribute to a more effective control of inflation and thereby to better prospects for sustained growth, the merits of three monetary strategy options are reviewed: stricter adherence to a money supply rule, adoption of an exchange rate peg, and a switch to direct inflation targeting.
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Cover IMF Policy Discussion Papers
IMF Policy Discussion Papers
ISSN:
1564-5193
Publisher:
International Monetary Fund