The effective implementation of monetary policy requires the ability to respond appropriately to developments in various financial markets. Since the onset of the great financial crisis, monetary policy strategies in several countries have become increasingly unconventional, encompassing large-scale asset purchase, forward guidance and negative nominal interest rates. Moreover, monetary policy operations now also encompass financial-stability objectives. Are there lessons to be learned for monetary policy strategies after the great financial crisis? This course will discuss how monetary policy strategies and operations need to be structured and implemented to achieve the desired objectives under different circumstances.
The course aims to equip participants with the tools necessary to give advice on the implementation of monetary policy in different circumstances. In particular, participants will learn to: (1) conduct liquidity forecasting; (2) assess alternative methods for policy interest rate management; (3) evaluate strategies under inflation targeting and other approaches; (4) assess the need for interventions in the foreign exchange market in response to currency volatility, currency misalignments, and capital flows; and (5) determine the need for, and consequences of, sterilisation policies.
Central bank staff who are responsible for advising on, or carrying out, monetary policy operations. Participants should have at least two years’ experience in this function.
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