Improving the Monetary Policy Frameworks in Central America

Several Central American (CADR) countries with independent monetary policies are strengthening their monetary frameworks and some have implemented or are moving towards inflation targeting (IT) regimes. Strengthening the monetary policy frameworks of CADR is key to improving the effectiveness of monetary policy. The paper reviews the literature on the reforms needed for strengthening the monetary policy frameworks, and examines the experiences of IT countries, Chile, Peru, and Uruguay to help distill lessons for CADR. It also constructs an index to measure the relative strength of the monetary policy framework of CADR countries.

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Year of publication:	2011-10-01
Institutions:	International Monetary Fund (IMF) ; International Monetary Fund
Subject:	Inflation targeting \| Latin America \| monetary policy \| inflation \| central bank \| price stability \| reserve requirements \| monetary policy frameworks \| monetary policy framework \| foreign exchange \| monetary fund \| foreign currency \| monetary frameworks \| monetary base \| inflation target \| money market \| average inflation \| lower inflation \| monetary policy regime \| government securities \| open market operations \| treasury bonds \| liquidity management \| monetary policy instruments \| monetary instruments \| monetary framework \| financial stability \| inflation objective \| aggregate demand \| annual inflation \| monetary program \| monetary aggregate \| monetary policy decisions \| monetary reforms \| inflation forecasts \| inflation rates \| monetary policy objectives \| monetary stability \| monetary targets \| real interest rate \| monetary policy independence \| monetary data \| macroeconomic stability \| monetary policy rule \| independent monetary policy \| inflation rate \| intermediate monetary targets \| monetary policy strategy \| inflation targeting regime \| forecasting inflation \| monetary transmission mechanism \| monetary policy strategies \| monetary conditions \| monetary decisions \| monetary policy implementation \| monetary policies \| long-term interest rates \| price inflation \| minimum reserve requirements \| rediscount rate \| monetary transmission \| money demand \| reserve requirement \| transmission of monetary policy \| monetary law \| inflation response \| terms of trade \| terms of trade shocks \| inflationary pressures \| treasury securities \| monetary instrument \| independent monetary policies \| variable inflation \| price level \| inflation performance \| monetary objective \| monetary target

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series IMF Working Papers Number 11/245 3 pages long
Source:	RePEc - Research Papers in Economics

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