EDB Special report 2019. Exchange rate pass-through effects on inflation in EDB Member Countries

Aleksei Kuznetsov () and Aigul Berdigulova ()
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Aleksei Kuznetsov: Eurasian Development Bank, Postal: 1-st Zachatievskiy pereulok house 3 block 1 Moscow 119034 Russia
Aigul Berdigulova: Eurasian Development Bank, Postal: 21 Erkindik Blvd Bishkek 720040 Kyrgyz Republic

No 2019-7, Working Papers from Eurasian Development Bank, Chief Economist Group

Abstract: This Special Report examines the pass-through effect of the exchange rate on inflation in member countries of the Eurasian Development Bank. Special attention is paid to assessing pass-through effect changes that occurred in recent years and to analyzing asymmetric and non-linear relationships between exchange rates and inflation in the region’s countries. The results obtained confirm the exchange rates’ significance for inflation movements in EDB economies. That said, in 2015-2018 the exchange rate’s pass-through effect on inflation decreased in magnitude in most of the States under review, possibly on account of the monetary and exchange rate policy reforms implemented – in particular, a switch to a more flexible exchange rate and more effective monetary policies. In a number of Eurasian Development Bank member countries, the pass-through was noted to have an asymmetric effect, with consumer prices being more responsive to weakening than to strengthening of their national currencies.

Keywords: macroeconomy; inflation; Eurasia; EAEU countries; economic growth; monetary policy (search for similar items in EconPapers)
JEL-codes: E17 E52 E66 O11 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2019-06-25
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Persistent link: https://EconPapers.repec.org/RePEc:ris:eabrwp:2019_007

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