The role of the exchange rate in the monetary frameworks of emerging market economies

Speech by Malcolm D Knight, General Manager of the BIS, at the Black Sea Governors' Club, St Petersburg, 27 May 2005.

Mr Knight discusses the challenge of determining an exchange rate regime for emerging market countries undergoing rapid disinflation and structural transformation. He reviews special considerations that make the choice of exchange rate regime and monetary policy framework in emerging market economies complex. He emphasises the need for consistency between monetary and exchange rate policies once this choice is made, and points to some lessons for the conduct of monetary policy in countries in the Black Sea Club.