Republic of Armenia: Selected Issues

International Monetary Fund

No 2023/417, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper assesses the Central Bank of Armenia’s (CBA) monetary policy framework. It discusses the CBA’s track record with inflation targeting; describes the risk-based approach to price stability, offering insights on its potential benefits, while cautioning of likely pitfalls and highlighting the clear challenges for its operationalization in Armenia’s context; and emphasizes areas in which the monetary policy framework needs to strengthen further to ensure its effectiveness, especially should the new monetary policy approach be fully implemented. Enhancements in the CBA’s monetary policy framework should be guided by best principles. Publishing a comprehensive expert assessment of CBA’s monetary policy framework will guide the reforms and raise the credibility of the enhanced framework. While such enhancements to the monetary policy framework are being put in place, an operationalization of the risk management approach to price stability may present important challenges. The communication strategy should not only detail the decision-making process, but also strengthen the explanation of how policy will respond if risks materialize.

Keywords: Armenia's monetary policy framework; inflation targeting track record; I. social assistance program; benefit incidence; IMF staff calculation; impact of program; family benefit Program; Social assistance spending; Monetary policy frameworks; Maternity and childcare benefit spending; Total factor productivity; Inflation targeting; Global; Central and Eastern Europe; Central Asia (search for similar items in EconPapers)
Pages: 36
Date: 2023-12-14
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