Adopting Inflation Targeting: Practical Issues for Emerging Market Countries

Inflation targeting is gaining in popularity among emerging market countries. This has led to an increased demand for technical assistance from the IMF to help these countries meet the practical challenges that they face in adopting this policy regime. This paper summarizes the lessons that can be drawn for emerging market countries on the operational and institutional policy challenges posed by inflation targeting. It is based on industrial countries' experiences with inflation targeting as well as the relatively short experience of emerging market countries. The lessons drawn here can be expected to be refined as the range of country experience with inflation targeting widens.