The Empirical Analysis of the Exchange Rate Pass-Through in Lao PDR.

Khaysy Srithilat; Thipphavanh Samatmanivong; Viriyasack Sisouphanthong; Bounlert Vanhnalat; Phanphasa Lomchanthal Lomchanthala

Authors

Khaysy Srithilat Faculty of Economics and Business Management, National University of Laos, Lao PDR Author
Thipphavanh Samatmanivong Bank of the Lao PDR Author
Viriyasack Sisouphanthong Faculty of Economics and Business Management, National University of Laos, Lao PDR Author
Bounlert Vanhnalat Faculty of Economics and Business Management, National University of Laos, Lao PDR Author
Phanphasa Lomchanthal Lomchanthala Faculty of Economics and Business Management, National University of Laos, Lao PDR Author

Keywords:

Exchange rate pass-through, Inflation rate, monetary policy

Abstract

This paper provides a comprehensive analysis of exchange rate pass-through and their impact on inflation in Laos. The research used a Vector Autoregression (VAR) model to analyses the interaction between important macroeconomic variables. It also utilizes impulse response function analysis and variance decomposition to further investigate this relationship. The results of empirical research show that exchange rate, oil price and aggregate money has significant impact on inflation in Laos. The paper highlights the significance of policymakers in Laos taking into account ERPT mechanisms when formulating monetary policies