This study examines the challenges and issues facing policymakers in highly dollarized economies. Focusing on Cambodia, which achieved almost complete dollarization during 1991-95, the authors review recent developments in the literature on dollarization and examine the costs and benefits of...

This Background Paper on Vanuatu reviews the development of monetary control instruments in five small island economies in the South Pacific (Fiji, Solomon Islands, Tonga, Vanuatu, and Western Samoa) and draws some lessons from their experience. The paper highlights that, except Solomon Islands...

This 2003 Article IV Consultation highlights that Samoa’s GDP growth slowed to 1.9 percent in 2001/02. This slowdown reflected mainly a steep decline in agriculture and a sharp contraction in construction activity. Although underlying inflation has remained low, headline inflation...

This paper focuses on Ex Post Assessment of Longer-Term Program Engagement for Guinea. Guinea’s stabilization and reform efforts have been almost continuously supported by IMF financial arrangements since 1987. The paper reviews developments under the last two IMF-supported programs...

This 2002 Article IV Consultation highlights that since 2000, economic growth in Costa Rica has slowed to about 2 percent. Inflation has remained at 10 percent, and unemployment has remained at about 6 percent. The external current account deficit has increased to about 5.5 percent of GDP,...

Honduras’s First Review Under the Poverty Reduction and Growth Facility and Request for Waiver of Performance Criteria are discussed. The authorities are taking measures to contain inflation. The inflation target has been raised to accommodate the first-round impact of the oil price...

This paper explores how monetary policy affects other macroeconomic variables, mainly output and inflation. First, it provides an overview of the framework for implementing monetary policy and then discusses the transmission mechanism itself. In this study, the following statistical data are...

By definition, fiscal dominance impedes the effective implementation of any monetary strategy aimed at controlling inflation. Economies that exhibit oil dominance-a situation in which oil exports largely affect the main macroeconomic indicators-may also exhibit fiscal dominance. However, in this...

This paper reviews the current monetary and exchange rate policy frameworks in Armenia and Georgia, and the challenges associated with the choice of a credible nominal anchor in the context of large nominal and real shocks. The paper makes a case for a gradual transition to full-fledged...

This paper outlines the recent progress in developing Islamic financial instruments for the management of monetary policy and public borrowing requirements and provides details on new instruments currently being developed in the Islamic Republic of Iran and Sudan. The paper also touches on the...