Monetary transmission mechanisms in Belarus
By: prepared by Balázs Horváth and Rodolfo Maino.
Contributors: Maino, Rodolfo, 1961-; International Monetary Fund. Monetary and Financial Systems Dept.
Series: IMF working paper -- WP/06/246
Publisher: International Monetary Fund, Monetary and Financial Systems Dept.
Published: 2006
Place of publication: Washington, D.C
Language: eng
Number of pages: 22
Subjects: Transmission mechanism (Monetary policy) -- Belarus.; Monetary policy -- Belarus.; Belarus -- Economic policy -- 1991-; Belarus -- Economic conditions -- 1991-
Description: 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.
Notes: Caption title.

"November 2006."

Includes bibliographical references (p. 21-22).

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