Monetary Policy Frameworks in Latin America: Evolution, Resilience and Future Challenges

Ana Aguilar, Alexandre Tombini and Fabrizio Zampolli

Chapter 26 in Macro-financial Stability Policy in a Globalised World: Lessons from International Experience:Selected Papers from the Asian Monetary Policy Forum 2021 Special Edition and MAS-BIS Conference, 2023, pp 544-574 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Since the adoption of inflation targeting and flexible exchange rates, central banks in Latin America have had to cope with large and persistent capital inflows and currency appreciation, occasionally interrupted by shorter period of capital outflows and elevated exchange rate volatility. Despite these difficult conditions, central bank frameworks have proved generally resilient, including during the COVID-19 crisis. This chapter examines how central banks’ policy frameworks have evolved over the past two decades and what challenges lie ahead.

Keywords: Macro-financial Policy; Policy Framework; Macroprudential Policy; Monetary Policy; Fiscal Policy; Capital Flow Management Measure; Capital Control; Foreign Exchange Intervention; Integrated Policies; Multiple Policies; Policy Trade-off; Policy Substitute; Policy Complement; Policy Interaction; Policy Space; Central Bank; International Spillovers; Spillbacks; Sending Country; Receiving Country; Financial Channel; Financial Regulation; Financial Stability; External Stability; Advanced Economy; Emerging Market Economy; Capital Flow; Portfolio Flow; Banking Flow; Exchange Rate; Banking System; Non-bank Financial Institution; United Kingdom; Sweden; China; Hong Kong Sar; India; Indonesia; Korea; Singapore; Latin America; Croatia (search for similar items in EconPapers)
JEL-codes: E E52 E58 E6 F F01 F3 F38 (search for similar items in EconPapers)
Date: 2023
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