Spain pursued monetary targets in different forms for many years, while its exchange rate management became exchange rate targeting in the 1990s and the monetary targets were replaced by inflation targets in the last few years before entry to EMU in 1999.

Years Targets and attainment Classification
1974-7 unannounced/internal monetary targets met or near-met; monetary policy focused on controlling banks’ liquid assets via seven-day credits, with increasing use of (previously highly regulated) interest rates; exchange rate managed, with recurring depreciation loose monetary targeting LMT
1978-80 formal monetary targets met; exchange rate managed full monetary targeting FMT
1981-88 converging monetary targets mostly met, pursued by indirect instruments in context of gradual financial liberalisation; exchange rate managed, with growing concerns re competitiveness and inflation full converging monetary targeting FCMT
1989-94 in ERM from June 1989 (6% bands), devaluations 1992 (twice), 1993 and 1995; monetary targets met or near-met except for large undershoot 1992; continuing financial liberalisation; central bank independent from 1994 monetary plus exchange rate targeting M&ERT
1995-98 devaluation 1995 but currency returns to previous range, generally stable in ERM; inflation targets met inflation plus exchange rate targeting I&ERT
1999-2017 membership of European Monetary Union currency union CU

Selected IMF references: RED 1977 pp33-9, 59-60; RED 1982 pp19-20, 52-4; RED 1985 pp66-70, 98-9; RED 1991 pp44-6, 68; RED 1994 pp15-16, 19-20, 23-5; REDSI 1997 pp11-12, 15-19.

Additional sources: Houben (2000, especially pp221-4, 320-21); Ayuso and Escriva (1998).

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