Can a Rule-Based Monetary Policy Framework Work in a Developing Country? The Case of Yemen

Publication/Creation:

Washington, D.C. : International Monetary Fund, 2007

Resource Type:

Book

Edition:

1st ed.

More Details

Additional/Related Title Information

Full Title:

Can a Rule-Based Monetary Policy Framework Work in a Developing Country? The Case of Yemen

Series Titles:

IMF Working Papers
IMF Working Papers; Working Paper ; No. 2007/006

Related Names

Additional Author/Creators:

International Monetary Fund. Middle East and Central Asia Dept

Subjects/Genre

Subjects:

Monetary policy--Yemen (Republic)
Anti-inflationary policies--Yemen (Republic)

Description/Summary

Table of Contents:

Contents; I. Introduction; II. Key Considerations in Designing a Monetary Policy Framework for Yemen; A. Instability of Money Demand; B. Maintaining a Flexible Exchange Rate Regime; C. Exchange Rate Pass-through to Inflation; Figures; 1. Overall and Core Inflation, January 2000-July 2006; III. An Alternative Monetary Policy Framework; A. General Considerations; B. Instruments and Operating Targets; C. Monetary Policy Rule; IV. Forward-Looking Approach and the Need to Forecast Inflation; A. Forecasting Techniques; V. Concluding Remarks; Appendixes; I. Instability of Money Demand in Yemen
II. Evidence of Exchange Rate-Inflation Pass-Through in YemenIII. Inflation Forecasting Techniques for Yemen; Bibliography

Summary:

Monetary policy in Yemen is largely rudimentary and ad hoc in nature. The Central Bank of Yemen's (CBY) approach has been based on discretionary targeting of broad money without any clear target to anchor inflation expectations. This paper argues in favor of a new formal monetary policy framework for Yemen emphasizing a proactive and rule-based approach with a greater direct focus on price stability in the context of a flexible management of the exchange rate. Although, as in many developing countries, institutional capacity is a concern, adopting a more formal framework could impel the kind of changes that are required to strengthen the ability of the CBY in achieving low and stable rates of inflation over the medium term.

Language:

English

Language Note:

English

Physical Type/Description:

1 online resource (30 p.)

General Note:

"January 2007."
At head of title: Middle East and Central Asia Department.

Additional Identifiers

Catalog ID (MMSID):

9936718336002486

ISBN:

1-4623-9115-X
1-4527-5517-5
1-283-51562-8
1-4519-1023-1
9786613828071

OCLC Number:

568151235