Inflation Targeting in the Context of IMF-Supported Adjustment Programs

Gerd Schwartz, Pau Rabanal, Mario Bléjer and Alfredo Leone

No 2001/031, IMF Working Papers from International Monetary Fund

Abstract: This paper argues that the IMF's traditional monetary conditionality-a ceiling on net domestic assets of the central bank and a floor on its net international reserves-should be adapted in IMF-supported adjustment programs with countries which have a framework of explicit inflation targets for the implementation of monetary policy. This adaptation should aim at enhancing correspondence and consistency between the monetary objectives of the central bank and the targets established under the IMF-supported adjustment program, as well as between the different instruments used to achieve the policy objectives and targets. The paper reviews various general options in this regard, and, using the case of Brazil as an example, demonstrates how these options may be implemented in practice.

Keywords: WP; monetary policy; Fund; Inflation Targeting; Monetary Policy Rules; Brazil; inflation targeting framework; NIR floor; stance vis-à-vis; Fund program; NIR baseline; NIR loss; Inflation; Monetary stance; Monetary policy frameworks; Monetary base (search for similar items in EconPapers)
Pages: 24
Date: 2001-03-01
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Citations: View citations in EconPapers (18)

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Related works:
Chapter: Inflation Targeting in the Context of IMF-Supported Adjustment Programs (2002)
Journal Article: Inflation Targeting in the Context of IMF-Supported Adjustment Programs (2002)
Working Paper: Inflation Targeting in the Context of IMF-Supported Adjustment Programs (2001)
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