Rupee Exchange Rate Passthrough

The last few days have seen a sharp depreciation of the rupee. At a time when inflation is already high and there are significant inflationary pressures in the economy, an exchange rate depreciation is feeding into higher prices. There has recently been a lot of debate on whether there is a passthrough or not. I […]

Sub-prime Crisis: Argentina’s Consumption-Credit Variety

Global growth during the last five years provided a huge tailwind for agricultural producing countries boosting Argentina’s emergence of one of its biggest crises ever. The government response to this (temporary) windfall in its terms of trade and globalization not seen since the late 1800’s has been to stimulate consumption, instead of investment to capitalize […]

Asymmetric Climate Change

In a previous job incarnation, I once spent (enjoyed) ten days in a mission throughout Russia. During an official dinner in Krasnoyarsk, Siberia, the speaker was describing the challenges faced by the management of local forests when he suddenly interrupted his talk and asked: “by the way, what is all this fuss about global warming?” […]

The Impossible Trinity

Economists who are specialized in macroeconomic analysis of open economies like very much to mention several times the so-called “Impossible Trinity”, which was demonstrated in the sixties and seventies – still during the times of fixed exchange rates – by Nobel Prize Robert Mundell as well as other economists such as Fleming, Corden, Johnson and […]

Central Bank Intervention and Inflation Targeting in Emerging Markets: Lessons from the Experience of Colombia

Policymakers in many emerging markets are attempting to resist currency appreciation by intervening actively in currency markets, typically through the accumulation of international reserves. At the same time, many of these same countries have adopted inflation-targeting regimes to anchor inflation expectations, most often using short-term interest rates as their main operating target. Thus, limiting currency […]

Is the Party Over in Argentina? The Market Internalizes the Political Effects of Inconsistent Macro Policies (or vice-versa?)

The last couple of days financial markets in Argentina have shown capital flowing away from government bonds and into buying dollars (hoarding them, “jus in case”). This might seem at first glance controversial with the apparently sound macroeconomic figures: fiscal surplus, current account surplus, high growth rate, low official inflation rates, etc. I will argue […]

Sterilization, Monetary Policy, and Global Financial Integration in Asia and LATAM

In the late 1980s and early 1990s, emerging market countries embraced growing financial liberalization and openness. However, by trying to maintain both exchange rate fixity and monetary independence, they experienced severe financial crises. In the aftermath of these crises, many developing countries have adopted a policy configuration involving greater, though still managed, exchange rate flexibility, […]

Federal Public Debt Monthly Report

Primary Market Transactions

In November, Federal Public Debt – DPF issuances reached R$ 16.5 billion and redemptions corresponded to R$ 13.2 billion, resulting in net issuances of R$ 3.2 billion (R$ 4.4 billion refers to net issuances of Domestic Federal Public Debt – DPMFi and R$ 1.2 billion refers to net redemptions of the External Federal Public Debt – DPFe).

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