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Inflation targeting

The monetary policy of the South African Reserve Bank: stance, communication and credibility

Alberto Coco, Nicola Viegi
This paper analyses the evolution of the monetary policy stance, communication and credibility of the South African Reserve Bank (SARB) since 2000, when it adopted a flexible Inflation Targeting (IT) regime to facilitate the achievement of its price stability mandate. Empirical results indicate...
Jul 2019
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Estimating a Phillips Curve for South Africa: A Bounded Random Walk Approach

Alain Kabundi, Eric Schaling and Modeste Some
In this paper we estimate a Phillips curve for South Africa using a bounded random walk model. Central bank credibility, the slope of the Phillips curve, the natural rate of unemployment and the central bank’s in‡ation target band are time-varying. We …find that the slope of the Phillips curve has...
Dec 2015
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Variance Bounds as Thresholds for ‘Excessive’ Currency Volatility: Inflation Targeting Emerging Economies

Shaista Amod and Shakill Hassan
At what level does a currency’s volatility become ‘excessive’, in a concrete sense? Any claim that an exchange rate is excessively volatile needs a benchmark for ‘normal’variability. We compute variance bounds implied by exchange rate models as the norm, for a set of particularly volatile emerging...
Jan 2015
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The High-Frequency Response of the Rand-Dollar rate to Inflation Surprises

Greg Farrell, Shakill Hassan and Nicola Viegi
We examine the high-frequency response of the rand-dollar nominal rate within ten-minute intervals around (five minutes before, five minutes after) official inflation announcements, and show that the rand appreciates (respectively, depreciates) on impact when inflation is higher (respectively,...
Mar 2012
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Will the SARB always succeed in fighting inflation with contractionary policy?

Guangling (Dave) Liu
The conventional view is that a monetary policy shock has both supply-side and demand-side effects, at least in the short run. Barth and Ramey (2001) show that the supply-side effect of a monetary policy shock may be greater than the demand-side effect. We argue that it is crucial for monetary...
Mar 2012
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Terms of Trade Shocks and Inflation Targeting in Emerging Market Economies

Seedwell Hove, Albert Touna Mama and Fulbert Tchana Tchana
Emerging market economies (EMEs) have persistently experienced different waves of commodity terms of trade disturbances, generating macroeconomic instabilities. The adoption of in‡flation targeting (IT) by many emerging market economies has raised the questions about its relative suitability in...
Mar 2012
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