Monetary Transmission Mechanisms in Belarus

November 1, 2006

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Rodolfo Maino, and Balázs Horváth. Monetary Transmission Mechanisms in Belarus, (USA: International Monetary Fund, 2006) accessed December 23, 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

We explore monetary policy transmission by estimating VAR impulse response functions to illustrate the Belarusian economy's response to unexpected changes in policy and exogenous variables. We find a significant exchange rate pass-through to prices, and interest rate policy following, rather than leading, financial market developments. Our estimated monetary policy reaction function shows the central bank striking a balance between real exchange rate stability and containing inflation. We discuss dollarization, administrative interventions, and other features complicating monetary policy transmission, review specific constraints and vulnerabilities, and conclude with observations on possible measures that could raise the effectiveness of monetary policy in Belarus.

Subject: Currencies, Dollarization, Exchange rates, Foreign exchange, Inflation, Monetary policy, Money, Prices, Real exchange rates

Keywords: Banking system, Central bank, Currencies, Dollarization, Dollarization., Exchange rate, Exchange rate expectation, Exchange rates, Foreign exchange, Inflation, Interest rate, Interest rate channel, Monetary management, Monetary policy, Monetary policy action, Monetary policy effectiveness, Monetary policy formulation, Monetary policy implementation, Monetary policy transmission channels, NBRB's monetary policy strategy, Real exchange rates, Southeast Asia, Transmission mechanisms, Vis-à-vis U.S. dollar, WP

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/246
Stock No:

WPIEA2006246
ISBN:

9781451865066
ISSN:

1018-5941

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