The Analysis of the Monetary Policy after the Implementation of the Real Plan: 1994 the 2004
Abstract
This article investigates the impacts of the monetary policy in the implementation of the Real Plan. It emphasizes the component of the monetary basis and the behavior of the currency offer in the period from 1994 to 2004. The Real Plan was clearly the most successful attempt at stabilizing the Brazilian economy. It was conceived in three stages: the first one took place with the introduction of amechanism to balance the government budget, which was crucial to eliminate the main cause of inflation; the second one was marked by the establishment of a unit to define the relative prices of the economy: the Real Unit Value (URV); and the third stage was implemented with the creation of a new national currency called Real. The results indicate that the monetary policy managed by the Brazilian Central Bank was very active and restrictive, basically in order to prevent capital outflow and to keep inflation under control. Consequently it was necessary to adopt a high level of real interest rates.
Key words: monetary market; monetary policy; Plano Real; monetary aggregates; component of the monetary basis; interest rate.
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