Monetary Policy Credibility and Exchange Rate Pass-Through in South Africa - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Monetary Policy Credibility and Exchange Rate Pass-Through in South Africa write by Alain N. Kabundi. This book was released on 2018-07-30. Monetary Policy Credibility and Exchange Rate Pass-Through in South Africa available in PDF, EPUB and Kindle. This paper investigates the key factors that explain the documented decline in the exchange rate pass-through in South Africa over the past two decades, which coincides with the adoption of the inflation-targeting regime. The paper conjectures, in line with the literature, that this outcome is largely due to improved monetary policy credibility. To do this, it first documents the factors that explain monetary policy credibility. Using the standard deviation of individual inflation forecasts as a measure of monetary policy credibility, its shows that the latter is negatively affected by the level of inflation itself, monetary policy uncertainty, and a measure of the unobserved stochastic volatility of inflation. The second phase proceeds by analyzing the determinants of the pass-through using the monetary policy credibility index derived from the first phase. The paper confirms the remarkable achievement that, despite the many shocks that the economy has witnessed, the declining pass-through is indeed explained by the improving monetary policy credibility.
Exchange Rate, Second Round Effects and Inflation Processes
Exchange Rate, Second Round Effects and Inflation Processes - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Exchange Rate, Second Round Effects and Inflation Processes write by Eliphas Ndou. This book was released on 2019-04-23. Exchange Rate, Second Round Effects and Inflation Processes available in PDF, EPUB and Kindle. This book focuses on the exchange rate pass-through (ERPT), second round effects and the inflation process in South Africa. The authors demonstrate that magnitudes of the second round effects of the exchange rate depreciation and oil price shocks depend on inflation regimes. The impact of positive oil price shocks on inflation is weakened by monetary policy credibility. Evidence shows the influence of oil price on unit labour costs and correlation between exchange rate changes and inflation has weakened. In addition, ERPT is reduced by low business and consumer confidence, high trade openness, low inflation and high exchange rate volatility which weaken real economic activity. Both monetary and fiscal policy credibility lowers the sizes of ERPT to inflation and inflation expectations. Fiscal policy via fuel levies, administered prices and public transport inflation channel impacts the responses of monetary policy to inflation shocks. The authors show that second round effects contribute very little to wage inflation following an exchange rate depreciation shock. Both lending rate and household consumption responds asymmetrical to repo rate changes. This book will appeal to policymakers, students, academics and analysts.
Exchange Rate Volatility and Pass-Through to Inflation in South Africa
Exchange Rate Volatility and Pass-Through to Inflation in South Africa - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Exchange Rate Volatility and Pass-Through to Inflation in South Africa write by Mr.Ken Miyajima. This book was released on 2019-12-13. Exchange Rate Volatility and Pass-Through to Inflation in South Africa available in PDF, EPUB and Kindle. Does the South African rand’s relatively large volatility affect inflation? To shed some light on this question, a standard estimation technique of exchange rate pass-through to inflation is extended to incorporate exchange rate volatility. Estimated results suggest that higher exchange rate volatility tends to increase core inflation but to a relatively limited extent in South Africa. The finding lends support to the policy of allowing the rand to float freely and work as a shock absorber, consistent with the nation’s successful inflation targeting regime.
Exchange rate pass-through and monetary policy in South Africa
Exchange rate pass-through and monetary policy in South Africa - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Exchange rate pass-through and monetary policy in South Africa write by Janine Aron. This book was released on 2010. Exchange rate pass-through and monetary policy in South Africa available in PDF, EPUB and Kindle.
South Africa
South Africa - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook South Africa write by International Monetary Fund. African Dept.. This book was released on 2020-01-30. South Africa available in PDF, EPUB and Kindle. This Selected Issues paper studies the growth-inflation trade-off of monetary policy in South Africa. The combination of low growth and stubbornly high inflation expectations for a protracted period has complicated monetary policy decisions. The IMF staff analysis contributes to the ongoing growth-inflation trade-off discussion in South Africa, concluding that there is limited growth trade-off of monetary policy efforts to anchor inflation expectations at a lower level at present. The findings in this note suggest that the South African Reserve Bank should continue its efforts of anchoring inflation and inflation expectations at a lower level because monetary policy lends limited support to growth dampened by structural issues. During the 2010s, domestic demand growth responded little to monetary policy action. The environment of weak growth, low interest rates, and relatively moderate inflation (expectations) could have muted monetary policy transmission. Ultimately, the constraints to economic growth need to be removed. Meanwhile, inflation expectations continue to respond to monetary policy action albeit to a lesser extent. Monetary policy transmission through demand has weakened––demand growth does not systematically respond to monetary policy action nor does core inflation––but the exchange rate and credibility channels appear to remain operational.
