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EDB Special report 2019. Exchange rate pass-through effects on inflation in EDB Member Countries

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This Special Report examines the pass-through effect of the exchange rate on inflation in member countries of the Eurasian Development Bank. Special attention is paid to assessing pass-through effect changes that occurred in recent years and to analyzing asymmetric and non-linear relationships between exchange rates and inflation in the region’s countries. The results obtained confirm the exchange rates’ significance for inflation movements in EDB economies. That said, in 2015-2018 the exchange rate’s pass-through effect on inflation decreased in magnitude in most of the States under review, possibly on account of the monetary and exchange rate policy reforms implemented – in particular, a switch to a more flexible exchange rate and more effective monetary policies. In a number of Eurasian Development Bank member countries, the pass-through was noted to have an asymmetric effect, with consumer prices being more responsive to weakening than to strengthening of their national currencies.

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  • Kuznetsov, Aleksei & Berdigulova, Aigul, 2019. "EDB Special report 2019. Exchange rate pass-through effects on inflation in EDB Member Countries," Working Papers 2019-7, Eurasian Development Bank, Chief Economist Group.
    • Handle: RePEc:ris:eabrwp:2019_007
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    File URL: https://eabr.org/upload/iblock/5b5/EABR_Special_Report_A5_06_2019_EN.pdf
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    More about this item

    Keywords

    macroeconomy; inflation; Eurasia; EAEU countries; economic growth; monetary policy;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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