Monetary Transmission Mechanisms in Belarus
AbstractWe 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.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 06/246.
Date of creation: 01 Nov 2006
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-25 (All new papers)
- NEP-CBA-2006-11-25 (Central Banking)
- NEP-MAC-2006-11-25 (Macroeconomics)
- NEP-MON-2006-11-25 (Monetary Economics)
- NEP-TRA-2006-11-25 (Transition Economics)
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