This volume, which is a follow-up to BIS Policy Paper No 3 (January 1998), analyses the major changes in monetary policy transmission in the emerging market economies (EMEs) over the past decade and highlights a number of implications. It is based on two days of discussions among senior central bankers at a meeting at the BIS in December 2006. Fiscal dominance has been largely overcome and monetary policy frameworks are now more credible. The overview paper finds that central banks have become more flexible in their operations. The interest rate channels of monetary policy have become much stronger, and the relative importance of some of the traditional channels such as the credit channel has declined, at least in normal times. Better monetary policies have resulted in lower and less volatile inflation in most EMEs. An analysis of the transmission of monetary policy to longterm interest rates notes that the impact of the policy rates on long-term rates has been moderated by more stable inflation expectations, which has allowed central banks to be less aggressive in adjusting policies. External factors appear to be exerting an increasing influence on domestic long-term rates. A related analysis finds that greater globalisation has resulted in domestic short-term rates being significantly affected by foreign interest rates, particularly in countries with high capital mobility and with managed exchange rates. Finally, the pass-through from exchange rate changes to domestic inflation has fallen since 2001, while the sensitivity of inflation to foreign price changes has increased.
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ReDIF This book is provided by Bank for International Settlements in its series BIS Papers with number
35 and published in 2008.
Sweta C Saxena, 2008.
"Capital flows, exchange rate regime and monetary policy,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 81-102
Bank for International Settlements.
[Downloadable!]
Afonso S Bevilaqua & Mário Mesquita & André Minella, 2008.
"Brazil: taming inflation expectations,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 139-158
Bank for International Settlements.
[Downloadable!]
Yi Gang, 2008.
"The monetary policy transmission mechanism in China,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 179-181
Bank for International Settlements.
[Downloadable!]
Rakesh Mohan, 2008.
"Monetary policy transmission in India,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 259-307
Bank for International Settlements.
[Downloadable!]
Jerzy Pruski & Piotr Szpunar, 2008.
"The monetary transmission mechanism in Poland,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 427-437
Bank for International Settlements.
[Downloadable!]
Muhammad Al-Jasser, 2008.
"Monetary policy transmission mechanism in Saudi Arabia,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 439-443
Bank for International Settlements.
[Downloadable!]
Khor Hoe Ee & Saktiandi Supaat, 2008.
"The anchoring of inflation expectations in Singapore,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 445-449
Bank for International Settlements.
[Downloadable!]
Monetary Policy Department, Bank of Thailand, 2008.
"Changes in the monetary transmission mechanism in Thailand,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 451-474
Bank for International Settlements.
[Downloadable!]
Erdem Basci & Özgür Özel & Cagri Sarikaya, 2008.
"The monetary transmission mechanism in Turkey: new developments,"
BIS Papers chapters,
in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 475-499
Bank for International Settlements.
[Downloadable!]
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