Applying Foreign Exchange Interventions as an Additional Instrument Under Inflation Targeting: The Case of Ukraine

Anton Grui () and Volodymyr Lepushynskyi ()
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Anton Grui: National Bank of Ukraine

Visnyk of the National Bank of Ukraine, 2016, issue 238, 39-56

Abstract: This study examines applying foreign exchange rate interventions under Inflation Targeting regime in an Emerging Economy. For this purpose, we employ the Quarterly Projection Model of the National Bank of Ukraine and simulate different policy responses to various macroeconomic shocks. We discuss monetary policy objectives, which are low inflation volatility and accumulation of international reserves, and conclude that monetary policy could benefit from using interventions in addition to the key policy rate. We advise on particular policy reactions (with or without FX intervention) in case of different macroeconomic shocks.

Keywords: Foreign exchange interventions; inflation targeting; monetary policy; macroeconomic models (search for similar items in EconPapers)
JEL-codes: E17 E52 E58 F31 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ukb:journl:y:2016:i:238:p:39-56

DOI: 10.26531/vnbu2016.238.039

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