Exchange Rate Policy and Monetary Strategy Options in the Philippines: The Search for Stability and Sustainability

May 1, 1997

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Format: Chicago

Aerdt G. F. J. Houben Exchange Rate Policy and Monetary Strategy Options in the Philippines: The Search for Stability and Sustainability, (USA: International Monetary Fund, 1997) accessed December 26, 2024

Summary

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.

Subject: Exchange rate policy, Exchange rates, Foreign exchange, Inflation, Inflation targeting, Monetary base, Monetary policy, Money, Prices

Keywords: Capital goods, Exchange rate anchor, Exchange rate commitment, Exchange rate policy, Exchange rate rigidity, Exchange rates, Global, Inflation, Inflation targeting, Intervention policy, Monetary base, Monetary policy independence, Nominal exchange rate, PDP, Policy mix, Policy vis-a-vis, Stability vis-a-vis, U.S. dollar

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Policy Discussion Paper No. 1997/004
Stock No:

PPIEA0041997
ISBN:

9781451973341
ISSN:

1564-5193

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