Monetary policy in Latin America during the COVID19 crisis: Was this time different?

Detalhes
Monetário e Financeiro

Luiz Fernando de Paula, Paulo Saraiva e Mateus Ferreira

 

Emerging economies’ central banks generally respond to financial or external crisis by stemming massive capital outflows. The resulting sharp currency depreciation forced central banks in emerging economies to tighten monetary policy (PM) abruptly. The central banks of most Latin American economies reacted somewhat differently this time, however, during the COVID-19 crisis, implementing quantitative easing policy, cutting policy rates and introducing some non-conventional monetary policy measures. This paper examines the conventional and non-conventional monetary policy implemented by some major Latin American economies during the COVID-19 shock, seeking in particular to answer the following questions: Was this time different? Did these central banks apply non-conventional monetary policies? If so, what sort of nonconventional polices were implemented and for what purpose? What were the impacts?


Link: https://www.ie.ufrj.br/images/IE/TDS/2022/TD_IE_002_2022_PAULA_SARAIVA_FERREIRA.pdf