04453oam 22009734 450 991078841180332120230828232702.01-4623-7200-71-4527-3904-81-283-36411-597866138235571-4527-0332-9(CKB)3360000000443351(EBL)3014552(SSID)ssj0000940045(PQKBManifestationID)11528463(PQKBTitleCode)TC0000940045(PQKBWorkID)10948457(PQKB)10285497(OCoLC)694141265(MiAaPQ)EBC3014552(IMF)WPIEE2006150(EXLCZ)99336000000044335120020129d2006 uf 0engur|n|---|||||txtccrAn Empirical Investigation of the Exchange Rate Pass-Through to Inflation in Tanzania /Nkunde MwaseWashington, D.C. :International Monetary Fund,2006.1 online resource (36 p.)IMF Working Papers"June 2006."1-4518-6410-8 Includes bibliographical references.""Contents""; ""I. INTRODUCTION""; ""II. MONEY, EXCHANGE RATES, AND INFLATION IN TANZANIA""; ""III. A SURVEY OF THE LITERATURE""; ""IV. THE MODELING STRATEGY""; ""V. EMPIRICAL RESULTS""; ""VI. FACTORS BEHIND THE LOW AND DECLINING EXCHANGE RATE PASS-THROUGH""; ""VII. CONCLUSION AND POLICY RECOMMENDATIONS""; ""DATA SOURCES AND ESTIMATION""; ""ROBUSTNESS TESTS""; ""References""The paper examines the effect of exchange rate changes on consumer prices in Tanzania using structural vector autoregression (VAR) models. Using a data set covering the period 1990-2005, we find that the exchange rate pass-through to inflation declined in the late 1990s despite the depreciation of the currency. This could be partly attributed to the macroeconomic and structural reforms that were implemented during this period. The decline in the pass-through does not necessarily imply that exchange rate fluctuations are less significant in explaining macroeconomic fluctuations. The recent increase in the share of imports in the economy suggests that the pass-through could rise over the medium term. The findings imply that the authorities should remain vigilant in assessing the potential impact of foreign prices on the dynamics of inflation in Tanzania. In this regard, the authorities should seek to maintain low and stable inflation and continue the ongoing structural reforms designed to improve efficiency and increase competition.IMF Working Papers; Working Paper ;No. 2006/150Foreign exchange ratesTanzaniaInflation (Finance)TanzaniaForeign ExchangeimfInflationimfMacroeconomicsimfMoney and Monetary PolicyimfPrice LevelimfDeflationimfMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralimfCurrencyimfForeign exchangeimfMonetary economicsimfExchange ratesimfExchange rate pass-throughimfMonetary baseimfConsumer price indexesimfPricesimfMoney supplyimfPrice indexesimfTanzania, United Republic ofimfForeign exchange ratesInflation (Finance)Foreign ExchangeInflationMacroeconomicsMoney and Monetary PolicyPrice LevelDeflationMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralCurrencyForeign exchangeMonetary economicsExchange ratesExchange rate pass-throughMonetary baseConsumer price indexesPricesMoney supplyPrice indexesMwase Nkunde1546559DcWaIMFBOOK9910788411803321An Empirical Investigation of the Exchange Rate Pass-Through to Inflation in Tanzania3802254UNINA