Two targets, two instruments: Monetary and exchange rate policies in emerging market economies

Two targets, two instruments: Monetary and exchange rate policies in emerging market economies

This paper examines the case for using two instruments—the policy interest rate and sterilized foreign exchange market intervention—in emerging market…

Economist Alfredo Blanco analyzed Javier Milei’s latest exchange rate measures, the tensions faced by the economic program and the challenges after the exit of the stocks. While he stressed the importance of having ordered the fiscal accounts, he warned about risks due to inflation, social tensions and the interest rate. “The decisions to normalize the exchange market are reasonable, but much remains to be achieved to achieve an economic recover…

Specialists analyze the consequences of devaluation on economic activity. It increases the interest rate, loss of purchasing power and limited margin of export rise resulting from the fall in the price of commodities.