Transmisia variațiilor cursului de schimb în indicii de inflație
Transmission of exchange rates deviation to inflation

Summary/Abstract: After the fall of the Bretton Woods system, which lead to high exchange rate volatility worldwide, accompanied by raising inflation rates, a new concept gained popularity among the economy researchers. This concept is known as Exchange Rate Pass Through and it represents the degree of passing through of the exchange rate into prices. As for the central banks, knowing the intensity and the speed of the ERPT that affects the prices, plays a key role regarding the monetary policy implementation. In this paper, using a VAR model, the goal is to study the evolution of ERPT in time into the consumer and producer price indexes from Romania, a small open economy, between the years 2005-2022, the period that covers the inflation targeting as monetary policy strategy of the National Bank, and the results confirm the diminishing of ERPT during the analyzed period. At last but not least, this indicator also has an economic relevance, its levels being highly corelated with the developing level of an open economy country.

• Details
• Contents