Inflation and Its Measurement
Summary: This information document from the Bank of the Republic of Haiti (BRH) explains exchange rates, how they are determined, and the BRH's role in the foreign exchange market. It covers topics such as exchange rate regimes, quotation methods, and the factors influencing exchange rate fluctuations.
Key Findings
- The exchange rate is a crucial indicator for any central bank, reflecting the external value of the national currency.
- The BRH intervenes in the foreign exchange market to limit undesirable fluctuations in the exchange rate.
- The exchange rate is determined by the interaction of supply and demand for foreign currencies, but can also be influenced by other factors.
- Haiti operates under a floating exchange rate regime since 1991.
- The BRH requires banks to maintain a neutral foreign exchange position at the end of each day to limit speculation.
Full Description
This document provides an overview of exchange rates and the foreign exchange market in Haiti. It defines exchange rates, explains different exchange rate regimes (fixed, flexible, and intermediate), and discusses methods of quotation. The document also outlines the role of the Banque de la République d'Haïti (BRH) in managing the foreign exchange market, including interventions to stabilize the gourde and regulatory measures for banks. Key concepts such as appreciation, depreciation, devaluation, and the determinants of exchange rate formation are also explained.
How to cite
Bank of the Republic of Haiti (BRH), 2024, Inflation and Its Measurement, https://www.brh.ht/wp-content/uploads/Document-dInformation-7-1.pdf