Global Food Price Inflation and Policy Responses in Central Asia
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Summary:
This paper examines the implications of elevated global food prices for inflation in select Central Asian economies - Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. The findings suggest that global food inflation has significant short-run effects that build over time. Inflation outcomes simulated under alternative global wheat price assumptions underscore these vulnerabilities, and suggest that sustained administrative measures are unlikely to prove effective. In line with structural economic features, the interest rate channel of monetary policy is found to be limited, arguing for a broad policy strategy to control more expansive inflationary pressures. Looking ahead, measures to enhance supply responses, deepen domestic financial markets, develop adequate social safety nets, and increase central bank independence are warranted.
Series:
Working Paper No. 2012/086
Subject:
Agricultural prices Central bank autonomy Central bank policy rate Food prices Inflation
English
Publication Date:
March 1, 2012
ISBN/ISSN:
9781475502497/1018-5941
Stock No:
WPIEA2012086
Pages:
26
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