Monetary policy through COVID-19: Pushing on a string – the case of Latin America and the Caribbean by João Ayres, Pablo Andrés Neumeyer, Andrew Powell published by VOXEU (7/2021).
The ‘right’ monetary policy response to COVID-19 has depended on any number of factors for central banks across the world. This column argues that some central banks in Latin American and Caribbean went beyond accommodating the increased demand for liquidity, inducing monetary injections that then returned through excess bank reserves and sterilisation liabilities for those central banks that fixed an interest rate, and through sales of international reserves for those that favoured stable exchange rates. The authors also outline some of the risks confronting central banks for the months ahead.
