On the Possibility of Inflation Targeting in Kyrgyzstan

Type: Research Report
Size: 2MB
Date: 30 November 2012
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Other languages: Русский язык |

The paper examines the possibility of adopting inflation targeting framework in Kyrgyzstan. The examination suggests that it is premature for Kyrgyzstan to adopt full-fledged IT framework since most of the prerequisites for the successful IT adoption are not in place. However, the analysis and the results of the DSGE model calibrated for the country suggest that the country may adopt some form of hybrid inflation targeting regime. More specifically, the economy could benefit from a more aggressive policy control of inflation and minor interventions on the foreign exchange markets.