YEREVAN, September 8. /ARKA/. The inflation-targeting framework is working well and has benefited from CBA’s proactive policy actions and efforts to improve communication and develop capital markets, Head of Middle East and Central Asia Department at the International Monetary Fund (IMF), said in an exclusive interview with ARKA news agency.
According to him, the authorities have recently created an over-the-counter commercial trading platform for the overnight repo market and for the FX market transaction.
‘We have just published an IMF departmental paper on Monetary Policy Frameworks in the CCA, in which we identify main factors that affect monetary policy effectiveness in the CCA countries. First, financial markets remain relatively shallow, which weakens the interest rate, bank lending, asset price, balance sheet, and expectations channels of monetary transmission. Second, dollarization is still high, despite its gradual decline over the last decade. Third, central bank credibility and communication are hampered, in an environment of low trust in public institutions and low financial literacy. Therefore, there is further scope to strengthen the operational framework by developing financial markets and improving liquidity forecasting,’ Azour said.-0-
