Exchange rate pass-through and inflation: Policy insights for Vietnam based on comparative analyses across Asia (early view)

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Anh T. Q. Dang
Anh D. Pham

Abstract

This paper studies the effect of exchange rate pass-through (ERPT) on domestic inflation in Vietnam by comparing with other Asian economies. Specifically, pass-through mechanisms are examined for every single price as well as a distribution chain from import price index (IMP), producer price index (PPI) to consumer price index (CPI). The empirical results show that exchange rate shocks positively influence the price changes in Vietnam as well as in other Asian countries. According to Cholesky decomposition, the exchange rate plays a limited role in regulating CPI movements. Besides, world commodity prices are found to have a significant impact on domestic inflation across the sample-countries. Our findings reveal profound implications for monetary policy management and price stability.

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How to Cite
Exchange rate pass-through and inflation: Policy insights for Vietnam based on comparative analyses across Asia (early view). (2023). Asian Academy of Management Journal. https://doi.org/10.21315/
Section
Early Views