IMF Working Papers

Monetary Policy Coordination and the Role of Central Banks

By Rakesh Mohan, Muneesh Kapur

April 29, 2014

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Rakesh Mohan, and Muneesh Kapur. Monetary Policy Coordination and the Role of Central Banks, (USA: International Monetary Fund, 2014) accessed November 21, 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

The unconventional monetary policies (UMPs) pursued by the advanced economies (AEs) have posed macroeconomic challenges for the emerging market economies (EMEs) through volatile capital flows and exchange rates. AE central banks need to acknowledge and appreciate the spillovers resulting from such UMPs. Central banks of the AEs, who have set up standing mutual swap facilities, should explore similar arrangements with other significant EMEs with appropriate risk mitigation measures. These initiatives could do much to actually curb volatility in global financial markets and hence in capital flows to EMEs, thus obviating the need for defensive policy actions on the part of EMEs.

Subject: Balance of payments, Banking, Capital flows, Financial crises, Financial sector policy and analysis, Financial sector stability, Monetary policy, Spillovers, Unconventional monetary policies

Keywords: Capital account, Capital flows, Central bank, Central banks, Coordination, Deficit EMEs, Economy, EME authorities, EME authority, EME need, Emerging market, Emerging markets, Fast-growing emerging market economies, Fed chairman Bernanke, Fed's monetary policy, Financial sector stability, Global, Interest rate, Monetary policy, Monetary policy coordination, Spillovers, Support emerging market economies, Unconventional monetary policies, Unconventional monetary policy, WP

Publication Details

  • Pages:

    34

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2014/070

  • Stock No:

    WPIEA2014070

  • ISBN:

    9781484362518

  • ISSN:

    1018-5941

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