Exchange Rate Pass-Through in Brazil

July 1, 2003

Preview Citation

Format: Chicago

Agnes A Belaisch. Exchange Rate Pass-Through in Brazil, (USA: International Monetary Fund, 2003) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

In the last two years the real has undergone a large depreciation and the central bank has missed its inflation target in 2002 for the second year in a row. Inflation, however, has increased much less than the rate of currency depreciation and the pickup in inflation in the last quarter of 2002 raises the question of whether the exchange rate passthrough has finally risen. This paper argues that the passthrough in Brazil has fallen compared with estimates in other studies on earlier time periods, and remains low when compared with the passthrough in other Latin American countries. Indeed the passthrough is more comparable with that of G-7 countries—although in Brazil the effect on prices appears to be faster.

Subject: Consumer prices, Depreciation, Exchange rate adjustments, Exchange rates, Foreign exchange, Inflation, National accounts, Prices

Keywords: Brazil, Consumer prices, Depreciation, Exchange rate, Exchange rate adjustments, Exchange rate shock, Exchange rates, Global, Inflation, Inflation targeting, Market inflation expectation, Pass-through, Pass-through coefficient, Price, Price inflation, Shock pass, VAR, WP

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/141
Stock No:

WPIEA1412003
ISBN:

9781451856200
ISSN:

1018-5941

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