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IMF Ready To Help African Central Banks by generaladunna01(m): 6:29pm On Sep 14, 2016 |
The International Monetary Fund (IMF) has expressed its
readiness to help sub-Saharan African economies
whenever it is required to do so.
IMF deputy managing director, Mitsuhiro Furusawa, gave
the indication, on Tuesday, noting that central banks in the
region had been facing some challenges that needed help
from IMF.
“The IMF is fully committed to providing any assistance
that the Kenyan authorities and those across Africa may
need to continue upgrading the monetary policy
frameworks to address the challenges of the future,” he
said.
The IMF official cited Nigeria’s economy at the moment and
said “at times there may appear to be a conflict between
the goals of low inflation and economic growth”.
“But we have learned from hard experience that high
inflation distorts the private sector’s savings and
investment decisions — leading ultimately to slower
growth,” he said in Kenya.
“That is why countries have increasingly placed greater
emphasis on price stability, and many of them have made
low and stable inflation the primary objective for monetary
policy.
He also said, “new central banks lacked independence from
their governments: they were directed to finance large
fiscal deficits. There were pervasive foreign exchange and
interest rate controls”.
“The weaker relationship between money and inflation, and
the changing financial landscape, are again calling on
African central banks to adjust their strategies.
“Ghana, South Africa, and Uganda have adopted formal
inflation-targeting regimes. Other countries with flexible
exchange rate regimes are de-emphasizing the role of
monetary aggregates and incorporating elements of the
monetary policy practices of industrial and emerging
market countries.”
Furusawa recommended that: “First, the central bank
should have a clear legal mandate of policy goals and
operational independence to pursue these goals,” he said.
“Second, the primary, medium-term objective of monetary
policy should be price stability. Monetary policy ultimately
has a limited capability to directly influence real variables
such as output growth over the long-term.
“Third, the central bank should make a medium-term
numerical inflation objective the cornerstone for its
monetary policy actions and communications. A
transparent inflation objective provides a simple benchmark
against which to measure performance.
“Fourth, the central bank should carefully take into account
the implications of monetary policy adjustments for
financial stability. However, this should not come at the
expense of undermining the central role of the medium-
term inflation objective. Any significant erosion of central
bank credibility can change inflationary expectations for
the worse. This, in turn, could have an undesirable impact
on real activity and financial stability.
“Fifth, the central bank should have a clear and effective
operational framework, by setting an operating target and
clearly communicating the link between such an operating
target and the medium-term inflation objective. This
supports the functioning of money markets.
“Sixth, the central bank should have a transparent,
forward-looking monetary policy strategy that reflects
timely and comprehensive assessments of the monetary
transmission mechanism.
“Seventh, central bank communications should be
transparent and timely. This helps reduce uncertainty,
improves monetary policy transmission, and facilitates
accountability. The goal must be to build credibility.” |
Re: IMF Ready To Help African Central Banks by Syvyd199: 7:15pm On Sep 14, 2016 |
Hello every one, how are you? |
Re: IMF Ready To Help African Central Banks by Eowriand389: 7:21pm On Sep 14, 2016 |
Hello every one, how are you? |
Re: IMF Ready To Help African Central Banks by Nobody: 7:41pm On Sep 14, 2016 |
Eowriand389: Syvyd199:Busted two accounts |
Re: IMF Ready To Help African Central Banks by Flyingngel(m): 8:46pm On Sep 14, 2016 |
IMF better help itself before thinking of helping others. Nonsense people that r looking for ways to renders us puppets forever. |
(1) (Reply)
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