Weathering the Global Storm: The Benefits of Monetary Policy Reform in the LA5 Countries

December 1, 2010

Preview Citation

Format: Chicago

Weathering the Global Storm: The Benefits of Monetary Policy Reform in the LA5 Countries, (USA: International Monetary Fund, 2010) 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

This paper highlights that central banks from Brazil, Chile, Colombia, Mexico, and Peru (the LA5 countries) reaped the benefits of what they sowed in successfully weathering the global crisis. The adoption of far-reaching institutional, policy, and operational reforms during the last two decades enabled central banks to build credibility about their commitment with the objective of price stability. Thus, when the 2007 - 08 supply shock and the financial crisis hit the world, the LA5 central banks reacted swiftly and effectively based on a flexible policy framework and with the support of strong macroeconomic and financial foundations. Building on the experience of the LA5 central banks and complementing with recommendations from the IMF’s technical advice, the paper provides several suggestions for countries seeking to strengthen the effectiveness of monetary policy.

Subject: Banking, Central bank policy rate, Inflation, Inflation targeting, Reserve requirements

Keywords: Annual percentage rate, Economic activity, Financial crisis, Foreign exchange, Inflation expectation, Legislation data base, WP

Publication Details

Pages:

56
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2010/292
Stock No:

WPIEA2010292
ISBN:

9781455211739
ISSN:

1018-5941

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