Does Inflation or Currency Depreciation Drive Monetary Policy in Russia?

Research in International Business and Finance, 2006, vol. 20, issue 2, pages 163-179

Posted: 25 Oct 2013

See all articles by Brigitte Granville

Brigitte Granville

Queen Mary, University of London

Sushanta Mallick

Queen Mary - University of London; Queen Mary University of London

Abstract

This paper analyses the persistence of inflation in post-communist Russia, with interest rate, exchange rate, and money supply as key arguments. The paper then derives a monetary policy feedback rule, which has been used to show empirically in the context of Russia that the official interest rate has reacted more to exchange rate changes than reacting to inflation, thereby keeping inflation as a persistent problem. This implies a need to have a "flexible targeting rule" for inflation so as to bring it under control, which would make interest rate as a key monetary policy instrument for price stability.

Keywords: Monetary policy reaction function, Exchange rate, Fisher relation, Inflation, Interest rate, Russia

JEL Classification: C13, E43, E58, P24, P34

Suggested Citation

Granville, Brigitte Evelyne and Mallick, Sushanta and Mallick, Sushanta, Does Inflation or Currency Depreciation Drive Monetary Policy in Russia?. Research in International Business and Finance, 2006, vol. 20, issue 2, pages 163-179 , Available at SSRN: https://ssrn.com/abstract=2344413

Brigitte Evelyne Granville (Contact Author)

Queen Mary, University of London ( email )

Mile End Road
London, London E1 4NS
United Kingdom

Sushanta Mallick

Queen Mary University of London ( email )

Mile End Rd
London, E1 4NS
United Kingdom
+44 20 7882 7447 (Phone)

HOME PAGE: http://skmallick.busman.qmul.ac.uk/

Queen Mary - University of London ( email )

School of Business and Management
Mile End Road
London, England E1 4NS
United Kingdom
+44 20 7882 7447 (Phone)

HOME PAGE: http://skmallick.busman.qmul.ac.uk/

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
281
PlumX Metrics