Germany

Germany always had a concern with monetary growth, with formal targets from 1975 used as an intermediate objective in pursuit of price stability. At the same time it was a member of the Snake and then of the EMS, and acted to preserve the exchange rate parity to varying extents in response to wider international and European developments.

Years Targets and attainment Classification
1974 aim of restricting growth of central bank money but no announced target; forex interventions within Snake loosely structured discretion LSD
1975-85 monetary targets mostly met, forex intervention mainly vs USD but some vs European currencies within Snake, then from 1979 within EMS; monetary control mainly via OMOs and rediscount facilities monetary with exchange rate targeting MwERT
1986-87 monetary targets overshot, interest rates and heavy forex intervention used to limit appreciation exchange rate with monetary targeting ERwMT
1988-91 monetary targets attained; German Economic, Monetary and Social Union May 1990 MwERT
1992-93 monetary target overshot 1992, barely attained 1993; heavy intervention in ERM upheavals ERwMT
1994-8 monetary targets attained 4 years out of 5, in hardening EMS MwERT
1999-2014 membership of European Monetary Union currency union CU

Selected IMF references: RED 1975 pp31 -3, 43; RED 1982 pp31-2, 42-4, 56; RED 1985 pp31-4, 55-8; RED 1988 pp13-16, 35-6; EDSBI 1994 pp16-18.

Additional sources: Houben (2000, especially pp 196-7, 308-9); Beyer et al (2009); Gros and Thygesen (1998, especially pp169-70).

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