01854cas a2200265 a 4500 AALejournalIMF007132 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455226078 1018-5941 BD-DhAAL BD-DhAAL Ding, Ding. Towards Inflation Targeting in Sri Lanka / Ding Ding, Rahul Anand, Shanaka Peiris. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper develops a practical model-based forecasting and policy analysis system (FPAS) to support a transition to an inflation forecast targeting regime in Sri Lanka. The FPAS model provides a relatively good forecast for inflation and a framework to evaluate policy trade-offs. The model simulations suggest that an open-economy inflation targeting rule can reduce macroeconomic volatility and anchor inflationary expectations given the size and type of shocks faced by the economy. Sri Lanka could aim to target a broad inflation range initially due to its susceptibility supply-side shocks while enhancing exchange rate flexibility and strengthening the effectiveness of monetary policy in the transition to an inflation forecast targeting regime. Mode of access: Internet Anand, Rahul. Peiris, Shanaka. IMF Working Papers; Working Paper ; No. 2011/081 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/081/001.2011.issue-081-en.xml IMF e-Library