Inflation Targeting at 20: Achievements and Challenges, Issues 2009-2236
This paper examines the role of the derivatives market in South Africa and provides policy options for promoting the development of derivatives markets in sub-Saharan Africa. South Africa's derivatives market has grown rapidly in recent years, supporting capital inflows and helping market participants to price, unbundle and transfer risk. There are tight regulations on asset allocations by insurance and pension funds to prevent excessive risk taking. The development of derivatives markets in sub-Saharan African countries could enable market participants to self-insure against volatile capital flows. Theiroverdependence on bank credit as a source of funding could be reduced and their management of seasonal risk could be improved through the introduction of commodity futures. However, these markets must be appropriately regulated and supervised. Since such markets would likely be small, consideration should be given to the establishment of a regional derivatives market.
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Performance Under Inflation Targeting
Issues and Challenges for Inflation Targeting
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asset price Author's calculations bank's Batini central bank accountability core inflation countries adopting developing countries Deviation of inflation directly to financial disinflation emerging market economies exchange rate pegs Exchange rate targets Figure financial sector developments financial stability G+CB No Yes G+CB Yes Yes Ghana global financial crisis Guatemala headline inflation high income countries Hungary Iceland income IT countries Indonesia industrial countries Inflation and growth inflation from target low income countries macroeconomic performance market and developing Median country values Mishkin and Schmidt-Hebbel monetary policy Monetary Policy Regimes non-IT countries Non-IT low income Non-voting percent percentage points versus policy accountability policy credibility policy framework policy transmission policy transparency Price stability G+CB Quarterly No Explicit Roger and Stone Romania Schmidt-Hebbel 2005 Serbia Slovakia stability CB stable inflation targets supply shocks target misses target ranges transmission mechanism Tuladhar typically Vega and Winkelried volatility Voting member Winkelried 2005 Yes Quarterly Yes Yes Semi-annual Zealand