To summarize, our empirical results suggest that the key drivers of inflation in the short-run
are movements in the nominal effective exchange rate. Credit growth has a significant
positive impact on inflation over a medium-term horizon of 2-10 quarters while positive
shocks to real GDP growth tend to generate inflationary pressures after 4 quarters, with the
impact lasting for the subsequent 5 quarters. Interest rate shocks tend to have a significant
impact on GDP growth and on growth in credit to the economy over the short- to mediumterm.