Inflation in emerging markets driven by exchange rates: IMF study
An IMF paper published on Thursday says the exchange rate monetary policy channel is the most effective mechanism through which monetary policy impacts inflation in emerging market countries.
Rudrani Bhattacharya, Ila Patnaik and Ajay Shah, the paper's authors, explore the effects of monetary policy in India on aggregate demand and the exchange rate pass-through, which is measured here by the percentage change in domestic prices resulting from a 1% change in the exchange rate.
Bhattacharya
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