Monetary Policy Transmission In Vietnam
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Author | : Sajid Anwar |
Publisher | : |
Total Pages | : 31 |
Release | : 2018 |
Genre | : |
ISBN | : |
Since the economic reforms launched in 1986, the Vietnamese economy has registered impressive economic growth. While foreign investment is providing much needed capital, through the conduct of monetary policy, the State Bank of Vietnam (SBV), which is an integral part of the government of Vietnam, is also playing an important role in nurturing the economic growth. The aim of this paper is to evaluate the success of the SBV policies. Monetary policy actions affect all sectors of real economies with a significant lag. Without a good understanding of the transmission mechanism, monetary policy actions may not achieve the desired outcomes. Using quarterly data from 1995 to 2010, this paper focuses on monetary policy transmission mechanisms in Vietnam. Specifically, we consider the dynamic response of the Vietnamese economy to interest rate, exchange rate and foreign shocks. The estimated results based on structural vector autoregressive (SVAR) methodology suggest that monetary shocks tend to have a strong influence on Vietnam's output. We find that Vietnam's monetary policy is relatively more susceptible to foreign shocks.
Author | : Ms.Rina Bhattacharya |
Publisher | : International Monetary Fund |
Total Pages | : 22 |
Release | : 2013-07-03 |
Genre | : Business & Economics |
ISBN | : 1475554737 |
This paper provides an overview of inflation developments in Vietnam in the years following the doi moi reforms, and uses empirical analysis to answer two key questions: (i) what are the key drivers of inflation in Vietnam, and what role does monetary policy play? and (ii) why has inflation in Vietnam been persistently higher than in most other emerging market economies in the region? It focuses on understanding the monetary policy transmission mechanism in Vietnam, and in understanding the extent to which monetary policy can explain why inflation in Vietnam has been higher than in other Asian emerging markets over the past decade.
Author | : Xuan Vinh Vo |
Publisher | : |
Total Pages | : 0 |
Release | : 2017 |
Genre | : |
ISBN | : |
A thorough understanding of the transmission mechanism is a key requirement for central banks for successful implementation of monetary policy. This paper investigates the existence of the interest rate channel, exchange rate channel and asset price channel in Vietnam by employing a vector autoregressive model analysis using monthly data ranging from 2003M1 to 2012M12. The results from the analysis present evidence for a cost channel. However, we find no evidence for the existence of an exchange rate channel or asset price channel of monetary transmission in Vietnam.
Author | : Allan Dizioli |
Publisher | : International Monetary Fund |
Total Pages | : 25 |
Release | : 2015-12-23 |
Genre | : Business & Economics |
ISBN | : 1513595660 |
The paper develops a small New-Keynesian FPAS model for Vietnam. The model closely matches actual data from 2000-2014. We derive an optimal monetary policy rule that minimizes variability of output, inflation, and the exchange rate. Compared to the baseline model, the optimal rule places a larger weight on output stabilization as the intermediate target to achieve inflation stability, while allowing greater exchange rate flexibility. We analyze the dynamics of key macro variables under various shocks including external and domestic demand shocks and a lift-off of U.S. interest rates. We find that the optimal monetary policy rule delivers greater macroeconomic stability for Vietnam under the shock scenarios.
Author | : |
Publisher | : Dr. Vuong Quan Hoang |
Total Pages | : 16 |
Release | : |
Genre | : |
ISBN | : |
Author | : Canh Nguyen |
Publisher | : |
Total Pages | : 14 |
Release | : 2014 |
Genre | : |
ISBN | : |
A thorough understanding of transmission mechanism is a key for central bank in implementing monetary policy successful. We use VAR model with monthly data from 2003M1 to 2012M12 to investigate the existence of interest rate channel, exchange rate channel and asset price channel in Vietnam. We find evidence of cost channel, meanwhile exchange rate channel and asset price channel are not existed in Vietnam.
Author | : Mr. Natan P. Epstein |
Publisher | : International Monetary Fund |
Total Pages | : 36 |
Release | : 2022-06-24 |
Genre | : Business & Economics |
ISBN | : |
We present a newly developed Quarterly Projection Model (QPM) for Vietnam. This QPM represents an extended version of the canonical New Keynesian semi-structural model, accounting for Vietnam-specific factors, including a hybrid monetary policy framework. The model incorporates the array of policy instruments, specifically interest rates, indicative nominal credit growth guidance, and exchange rate interventions, that the authorities employ to meet the primary objective of price stability. The calibrated model embeds a theoretically consistent monetary transmission mechanism and demonstrates robust in-sample forecasting accuracy, both of which are important prerequisites for the richer analysis and forecast-based narratives that support a forward-looking monetary policy regime.
Author | : Mr.Luis Brandao-Marques |
Publisher | : International Monetary Fund |
Total Pages | : 54 |
Release | : 2020-02-21 |
Genre | : Business & Economics |
ISBN | : 1513529730 |
Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
Author | : Le Viet Hung |
Publisher | : |
Total Pages | : 0 |
Release | : 2009 |
Genre | : |
ISBN | : |
Understanding the monetary transmission mechanism is crucial to central bankers. We analyze the monetary transmission mechanism in Vietnam, using the vector autoregression approach (VAR) and focusing on the reduced-form relationships between money, real output, price level, real interest rate, real exchange rate and credit. We find consistent evidence that monetary policy can affect real output. Surprisingly, the connection between money and inflation is less clear in the Vietnam case. As for the transmission mechanism, the credit and exchange rate channels are more important than the interest rate channel.
Author | : Ms.Rina Bhattacharya |
Publisher | : International Monetary Fund |
Total Pages | : 22 |
Release | : 2013-07-03 |
Genre | : Business & Economics |
ISBN | : 1484356918 |
This paper provides an overview of inflation developments in Vietnam in the years following the doi moi reforms, and uses empirical analysis to answer two key questions: (i) what are the key drivers of inflation in Vietnam, and what role does monetary policy play? and (ii) why has inflation in Vietnam been persistently higher than in most other emerging market economies in the region? It focuses on understanding the monetary policy transmission mechanism in Vietnam, and in understanding the extent to which monetary policy can explain why inflation in Vietnam has been higher than in other Asian emerging markets over the past decade.