IMF recommends NBB using continuous medium-term inflation target
<p> MINSK, Jun 30 - PrimePress. The International Monetary Fund (IMF) recommends that the National Bank of Belarus (NBB) use a continuous medium-term inflation target as a guideline for monetary policy instead of the current end-of-year inflation target, reads the IMF report released on June 29. </p> <p> </p> <p> The National Bank’s target is set as a ceiling (the current target is to keep inflation below 5 percent at end-2019) while “technically treated as a point target, which leaves the NBB with no buffer against unpredictable shocks to inflation that it might be too late for policy to address or that might require a too aggressive policy adjustment.” </p> <p> </p> <p> “Replacing the current target with a continuous medium-term point inflation target should help improve internal and external communications, should better anchor expectations, and would provide the NBRB with more flexibility in responding to temporary shocks,” the IMF says. </p> <p> </p> <p> The de facto monetary policy framework has become close to IT, or what often is referred to as “IT lite.” </p> <p> </p> <p> The NBB is in a position to shift to a more transparent forward-looking external communication, including by being allowed to publish forecasts, reads the report. End </p>
2020-07-01
Primepress
IMF recommends NBB using continuous medium-term inflation target
MINSK, Jun 30 - PrimePress. The International Monetary Fund (IMF) recommends that the National Bank of Belarus (NBB) use a continuous medium-term inflation target as a guideline for monetary policy instead of the current end-of-year inflation target, reads the IMF report released on June 29.
The National Bank’s target is set as a ceiling (the current target is to keep inflation below 5 percent at end-2019) while “technically treated as a point target, which leaves the NBB with no buffer against unpredictable shocks to inflation that it might be too late for policy to address or that might require a too aggressive policy adjustment.”
“Replacing the current target with a continuous medium-term point inflation target should help improve internal and external communications, should better anchor expectations, and would provide the NBRB with more flexibility in responding to temporary shocks,” the IMF says.
The de facto monetary policy framework has become close to IT, or what often is referred to as “IT lite.”
The NBB is in a position to shift to a more transparent forward-looking external communication, including by being allowed to publish forecasts, reads the report. End