Quarterly Projection Model for the National Bank of Rwanda

48 Pages Posted: 28 Jan 2021

See all articles by Jan Vlček

Jan Vlček

International Monetary Fund (IMF)

Mikhail Pranovich

University of Cambridge; International Monetary Fund (IMF); Joint Vienna Insitute

Patrick Hitayezu

National Bank of Rwanda

Bruno Mwenese

National Bank of Rwanda

Christian Nyalihama

National Bank of Rwanda

Date Written: December 2020

Abstract

National Bank of Rwanda (BNR) modernized monetary policy and transited to the price-based policy framework in January 2019. The Forecasting and Policy Analysis System (FPAS) is the cornerstone for the new forward-looking framework, which mobilizes and organizes resources and sets processes for regular forecasting rounds. The core of this system is a structural macroeconomic model for macroeconomic analysis and projections to support the BNR staff's policy recommendations to the monetary policy committee. This paper documents the quarterly projection model (QPM) at the core of the FPAS at the BNR. The model is an extension of the canonical structure in Berg et al (2006) to reflect specifics of the interest-rate-based policy framework with a managed exchange rate, the effect of agricultural sector and harvests on prices, and the role of fiscal policies and aid flows.

JEL Classification: E47, E52, C54, E31, F31, Q11, E43

Suggested Citation

Vlcek, Jan and Pranovich, Mikhail and Pranovich, Mikhail and Hitayezu, Patrick and Mwenese, Bruno and Nyalihama, Christian, Quarterly Projection Model for the National Bank of Rwanda (December 2020). IMF Working Paper No. 2020/295, Available at SSRN: https://ssrn.com/abstract=3774929

Jan Vlcek (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Mikhail Pranovich

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

University of Cambridge

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Joint Vienna Insitute

Mariahilferstrasse 97
Wien, A-1090
Austria

Patrick Hitayezu

National Bank of Rwanda ( email )

Rwanda

Bruno Mwenese

National Bank of Rwanda ( email )

Rwanda

Christian Nyalihama

National Bank of Rwanda ( email )

Rwanda

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