Nominal Anchors in the CIS

Peter Keller and Thomas Richardson

No 2003/179, IMF Working Papers from International Monetary Fund

Abstract: Monetary policy has become increasingly important in the countries of the Commonwealth of Independent States (CIS) as fiscal adjustment and structural reforms have taken root. Inflation has been brought down to relatively low levels in almost all of these countries, raising the question of what should be the appropriate nominal anchor at this stage. Formally, almost all CIS countries have floating exchange rate regimes, yet in practice they manage their exchange rates very heavily, perhaps because of high levels of dollarization (i.e., they suffer from "fear of floating"). This paper explores the issues underlying the choice of a nominal anchor in CIS countries and seeks to assess whether the present mixed regime will prove durable.

Keywords: WP; CIS country; exchange market intervention; CIS policymaker; money demand; balance of payments; managed float; underdeveloped exchange market; Monetary policy; exchange rates; nominal anchors; CIS context; underdeveloped exchange markets in the CIS; CIS trade; CIS policymakers state; policymakers state; CIS currency; CIS economy; Inflation; Inflation targeting; Dollarization; Currencies; Eastern Europe; Baltics (search for similar items in EconPapers)
Pages: 42
Date: 2003-09-01
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Citations: View citations in EconPapers (22)

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