The inflation targeting framework allows the exchange rate to be determined more fully by market forces than under a policy framework that tries to fix the currency. This has various advantages, with perhaps the key one being that movements in the currency help to moderate the very forces causing the currency’s value to move.
15 See, for example, Network for Greening the Financial System (NGFS), “Guide to Climate Scenario Analysis for Central Banks and Supervisors,” June 2020, https://www.ngfs.net/sites/default/files/medias/documents/ngfs_guide_scenario_analysis_final.pdf. 16 Federal Advisory Council (FAC) Record of Meeting, (February 4, 2021), https://www.federalreserve.gov/aboutthefed/files/fac-20210204.pdf. 17 Task Force on Climate-related Financial Disclosures, Final Report: Recommendations of the Task Force on Climate-related Financial Disclosures” (New York: TCFD, June 2017), https://assets.bbhub.io/company/sites/60/2020/10/FINAL-2017-TCFD-Report-11052018.pdf.