BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 8/2013:
Monetary policy regimes in CIS economies and their ability to provide price and financial stability
Marek Dabrowski ()
Abstract: Achieving price stability has been a serious challenge for
CIS countries. In the first half of the 1990s, they experienced very high
inflation or hyperinflation, which had originated in the perestroika period
and following the dissolution of the ruble area. After the introduction of
new currencies and stabilization programs in the mid-1990s, inflation
moderated to two-digit levels. However, for lack of sufficient fiscal
policy support, this partial progress did not succeed in preventing the
financial crisis of 1998/99. The economic boom of the 2000s allowed for a
return to macroeconomic stability with stronger fiscal fundamentals, but
nevertheless proved insufficient to withstand the shock from the global
financial crisis of 2008/09. The paper analyses the evolution monetary
policy regimes of in the CIS countries over the decade of the 2000s and
early 2010s and is based on the publicly available cross-country statistics
and other information provided by the IMF. The paper compares financial
openness in these economies both de jure and de facto. These findings will
be tested against the empirical data on exchange rate movements and changes
in central banks’ international reserves. The paper concludes with a
discussion on practical choices which CIS countries have in respect of
their future monetary policy regimes.
Keywords: monetary policy; CIS; financial openness; inflation; (follow links to similar papers)
JEL-Codes: E42; E58; P24; P52; (follow links to similar papers)
54 pages, May 2, 2013
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