Inflation targeting

Inflation targeting is a monetary policy in which a central bank tries to keep inflation in a declared target range —typically by adjusting interest rates.

How does it work? Examples: If inflation appears to be above the target, the bank is likely to "raise" interest rates. This usually (but not always) has the effect over time of cooling the economy and bringing down inflation. If inflation appears to be below the target, the bank is likely to "lower" interest rates. This usually (again, not always) has the effect over time of accelerating the economy and raising inflation.

What is required?

Target practitioners? Country Inflation targeting adoption date Inflation rate at adoption date (percent) 2010 end-of-year inflation (percent) Target inflation rate (percent) New Zealand Canada /- 1 United Kingdom Australia Sweden Czech Republic /- 1 Israel /- 1 Poland /- 1 Brazil /- 1

Country Inflation targeting adoption date Inflation rate at adoption date (percent) 2010 end-of-year inflation (percent) Target inflation rate (percent) Chile /- 1 Colombia South Africa Thailand Hungary /- 1 Mexico /- 1 Iceland /- 1.5 Republic of Korea /- 1 Serbia Turkey /- 2 Armenia /- 1.5 Ghana /- 2 Albania /- 1

Advantages of inflation targeting in Ukraine:

Conditions for the implementation of inflation targeting:

systematic evaluation of past, current and especially future inflation; coordination of tactical goals of monetary policy on the main - fight inflation by targeting it.

… for your attention!