Belarus needs to switch to inflation targeting to reduce inflation, stabilize inflation expectations, build up trust in home currency – NBB
<p> MINSK, Nov 24 - PrimePress. A changeover from monetary targeting to inflation target will help Belarus reduce inflation, stabilize inflation expectations, and build up trust in the Belarusian ruble. Head of research and strategic development at NBB Natalia Mironchik made a statement to this effect during a roundtable on 24 November. </p> <p> </p> <p> Mironchik said: “We believe we should enable all the conditions as soon as possible and transition to inflation targeting in order to stabilize inflation and secure the basic fundamental conditions for increasing the potential for economic growth. Inflation targeting will help reduce inflation, stabilize inflation expectations, and build up trust in the Belarusian ruble.” </p> <p> </p> <p> However, the NBB representative did not specify a possible timeline for such a transition. </p> <p> </p> <p> In her words, at present only 22 countries out of the 180 IMF member states rely on monetary targeting. </p> <p> </p> <p> According to the IMF, monetary targeting is chosen by countries with underdeveloped markets and regulated exchange rates. This group includes countries in Africa, Latin America and Asia, including China and two countries with floating exchange rates (Belarus and Madagascar). </p> <p> </p> <p> In Belarus, she said, monetary targeting has limited the ability of the National Bank to fully control monetary aggregates. </p> <p> </p> <p> “As domestic experience shows, it does not reduce and stabilise inflation expectations of the population. They remain quite high relative to annual inflation,” Mironchik said. </p> <p> </p> <p> That said, over the past 30 years the inflation targeting mode has become one of the most widespread, with more than 40 predominantly high- and upper-middle-income countries having introduced that mode. They account for more than 60% of global GDP. This mode is implemented in all of Belarus’ EEU trading partners, as well as in the US and the Eurozone. End </p> <p> </p> <p> </p>
2021-11-25
Primepress
Belarus needs to switch to inflation targeting to reduce inflation, stabilize inflation expectations, build up trust in home currency – NBB
MINSK, Nov 24 - PrimePress. A changeover from monetary targeting to inflation target will help Belarus reduce inflation, stabilize inflation expectations, and build up trust in the Belarusian ruble. Head of research and strategic development at NBB Natalia Mironchik made a statement to this effect during a roundtable on 24 November.
Mironchik said: “We believe we should enable all the conditions as soon as possible and transition to inflation targeting in order to stabilize inflation and secure the basic fundamental conditions for increasing the potential for economic growth. Inflation targeting will help reduce inflation, stabilize inflation expectations, and build up trust in the Belarusian ruble.”
However, the NBB representative did not specify a possible timeline for such a transition.
In her words, at present only 22 countries out of the 180 IMF member states rely on monetary targeting.
According to the IMF, monetary targeting is chosen by countries with underdeveloped markets and regulated exchange rates. This group includes countries in Africa, Latin America and Asia, including China and two countries with floating exchange rates (Belarus and Madagascar).
In Belarus, she said, monetary targeting has limited the ability of the National Bank to fully control monetary aggregates.
“As domestic experience shows, it does not reduce and stabilise inflation expectations of the population. They remain quite high relative to annual inflation,” Mironchik said.
That said, over the past 30 years the inflation targeting mode has become one of the most widespread, with more than 40 predominantly high- and upper-middle-income countries having introduced that mode. They account for more than 60% of global GDP. This mode is implemented in all of Belarus’ EEU trading partners, as well as in the US and the Eurozone. End