Exchange Rate Pass Through to Prices in Maldives

Exchange Rate Pass Through to Prices in Maldives

Author: Ms.Iyabo Masha

Publisher: International Monetary Fund

Published: 2012-05-01

Total Pages: 44

ISBN-13: 1475578563

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This study examines the degree of exchange rate pass through (EPRT) into producer and consumer prices in Maldives. ERPT to consumer prices is first estimated using a nonparametric approach. A recursive vector autoregression is then used to model both consumer and producer price changes. The nonparametric estimation indicates that ERPT to consumer prices is very high, both in absolute terms and relative to other countries. The dynamics of ERPT as derived from the empirical estimation indicate that ERPT to consumer and producer prices is significant but not complete, and that the impact of exchange rate changes persists into the second year.


An Empirical Assessment of the Exchange Rate Pass-through in Mozambique

An Empirical Assessment of the Exchange Rate Pass-through in Mozambique

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2021-05-06

Total Pages: 34

ISBN-13: 1513573691

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Determining the magnitude and speed of the exchange rate passthrough (ERPT) to inflation has been of paramount importance for policy-makers in developed and emerging economies. This paper estimates the exchange rate passthrough in Mozambique using econometric techniques on a sample spanning from 2001 to 2019. Results suggest that the ERPT is assymetric, sizable and fast, with 50 percent of the exchange rate variations passing through to prices in less than six months. Policy-makers should continue to pursue low and stable inflation and develop a strong track record of prudent macroeconomic policies for the ERPT to decline.


Exchange Rate, Second Round Effects and Inflation Processes

Exchange Rate, Second Round Effects and Inflation Processes

Author: Eliphas Ndou

Publisher: Springer

Published: 2019-04-23

Total Pages: 421

ISBN-13: 3030139328

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This book focuses on the exchange rate pass-through (ERPT), second round effects and the inflation process in South Africa. The authors demonstrate that magnitudes of the second round effects of the exchange rate depreciation and oil price shocks depend on inflation regimes. The impact of positive oil price shocks on inflation is weakened by monetary policy credibility. Evidence shows the influence of oil price on unit labour costs and correlation between exchange rate changes and inflation has weakened. In addition, ERPT is reduced by low business and consumer confidence, high trade openness, low inflation and high exchange rate volatility which weaken real economic activity. Both monetary and fiscal policy credibility lowers the sizes of ERPT to inflation and inflation expectations. Fiscal policy via fuel levies, administered prices and public transport inflation channel impacts the responses of monetary policy to inflation shocks. The authors show that second round effects contribute very little to wage inflation following an exchange rate depreciation shock. Both lending rate and household consumption responds asymmetrical to repo rate changes. This book will appeal to policymakers, students, academics and analysts.


Exchange Rate Pass Through to Prices in Maldives

Exchange Rate Pass Through to Prices in Maldives

Author: Iyabo Masha

Publisher:

Published: 2012-05-01

Total Pages: 23

ISBN-13:

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This study examines the degree of exchange rate pass through (EPRT) into producer and consumer prices in Maldives. ERPT to consumer prices is first estimated using a nonparametric approach. A recursive vector autoregression is then used to model both consumer and producer price changes. The nonparametric estimation indicates that ERPT to consumer prices is very high, both in absolute terms and relative to other countries. The dynamics of ERPT as derived from the empirical estimation indicate that ERPT to consumer and producer prices is significant but not complete, and that the impact of exchange rate changes persists into the second year.


Maldives

Maldives

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2011-09-26

Total Pages: 78

ISBN-13: 1463904339

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Owing to severe fiscal and external imbalances, the Maldives government adopted an IMF program in 2009. Despite some crucial initial actions, fiscal slippages and political polarization have undermined the restoration of sustainability. The key policy challenge is to prevent a fiscal crisis, achieve macroeconomic sustainability, and stimulate growth. The authorities concur with the need to tighten monetary policy. The authorities have welcomed the IMF program as a useful framework to guide and reinforce their efforts to restore external balance and fiscal sustainability.


The Distributional Implications of the Impact of Fuel Price Increases on Inflation

The Distributional Implications of the Impact of Fuel Price Increases on Inflation

Author: Mr. Kangni R Kpodar

Publisher: International Monetary Fund

Published: 2021-11-12

Total Pages: 34

ISBN-13: 1616356154

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This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.


Handbook of Small States

Handbook of Small States

Author: Lino Briguglio

Publisher: Routledge

Published: 2018-05-11

Total Pages: 628

ISBN-13: 1351181831

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This handbook covers a wide spectrum of issues relating to small states. Chapters in the volume have been grouped under the three main themes of economic, social and environmental issues. The economics sections include chapters dealing with trade, finance and regulatory frameworks, while the social theme covers health, migration, population ageing, as well as overall social wellbeing. The environmental theme examines matters such as measuring environmental performance, natural disasters, the ocean economy, and the validity of the Sustainable Development Goals. One major issue is the definition of small states. As this volume demonstrates, generally speaking, population is used to measure country size in the literature. However, it clearly emerges that there is no real consensus as to the population cut-off point that distinguishes small states from large ones. While the approaches taken by the authors vary, in all cases the chapters draw practical policy implications for small states. The book can therefore be considered as a wide-ranging depositary of information on small states with the aim of deriving policy prescriptions, and thus as an excellent resource for academics, students and policymakers.


Quality, Trade, and Exchange Rate Pass-Through

Quality, Trade, and Exchange Rate Pass-Through

Author: Natalie Chen

Publisher: International Monetary Fund

Published: 2014-03-12

Total Pages: 58

ISBN-13: 1475526393

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This paper investigates theoretically and empirically the heterogeneous response of exporters to real exchange rate fluctuations due to product quality. Our model shows that the elasticity of demand perceived by exporters decreases with a real depreciation and with quality, leading to more pricing-to-market and to a smaller response of export volumes to a real depreciation for higher quality goods. We test the proposed theory using a highly disaggregated Argentinean firm-level wine export dataset between 2002 and 2009 combined with experts wine rankings as a measure of quality. The model predictions find strong support in the data and the results are robust to different measures of quality, samples, specifications, and to the potential endogeneity of quality.


Maldives

Maldives

Author: Asian Development Bank

Publisher: Asian Development Bank

Published: 2015-08-01

Total Pages: 293

ISBN-13: 9292570455

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The Maldives has propelled itself to middle-income status despite its geographic constraints and the risks it faces as a small island economy. The economy has been growing in the last 5 years, but development challenges remain formidable. How can the Maldives sustain and improve the pace of its economic growth and reduce poverty and inequality? This report identifies the critical constraints to inclusive growth and discusses policy options to overcome such constraints.


Development and Welfare Policy in South Asia

Development and Welfare Policy in South Asia

Author: Gabriele Koehler

Publisher: Routledge

Published: 2014-03-05

Total Pages: 275

ISBN-13: 1136731059

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This book sheds light on social policies in six South Asian countries introduced between 2003 and 2013, examining the ways in which these policies have come about, and what this reflects about the nature of the state in each of these countries. It offers a detailed analysis of the nature of these policies introduced in recent years in Bangladesh, India, Maldives, Nepal, Pakistan and Sri Lanka, and illustrates the similarities and differences in policy approaches amongst the six countries. Through this analysis, the book explores the thesis of whether there is a particular type of ‘developmental welfare state’ that can be observed across South Asia. The focus is on social policies or policies designed to address poverty and deliver welfare at the level of programming and design, i.e. the stated intent of these policies. The book also presents an analysis of the fiscal space available in each of the six countries, thereby drawing conclusions about the financial feasibility of a ‘developmental welfare state’ model in the region. This comprehensive book uniquely explores critical aspects of policy debates on a possible move from welfare to ‘rights’. It introduces students and researchers in development studies, social policy and South Asian studies to innovative welfare programmes in South Asia and gives a new perspective on the nature and patterns of welfare in South Asia with the view of tackling inequality and promoting well-being.