IV Programs for Preventing Capital Account Crises
Author:
Mr. Atish R. Ghosh
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Mr. Juan Zalduendo https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Alun H. Thomas
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Mr. Jun I Kim
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Ms. Uma Ramakrishnan
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Mr. Bikas Joshi
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Language:
English
Print Publication Date:
16 May 2008
Keywords:
OP; crisis; IMF support; financing; IMF financing variable; market; IMF disbursement; IMF dummy; IMF willingness; IMF resource ratio; Capital account crisis; Crisis prevention; Liquidity

Abstract

One of the fundamental purposes of the IMF is to make its resources temporarily available to members experiencing balance of payments difficulties, easing the required balance of payments adjustment by attenuating it, and helping to “give confidence” by reconstituting gross international reserves. In a number of capital account crises, however, the magnitude and abruptness of the capital outflows has dwarfed available official financing, resulting in much sharper external adjustment than programmed (or than warranted by debt sustainability considerations) and significant economic dislocation.24 But even if available official financing attenuated external adjustment only to a limited extent once confidence was lost, IMF support can still help avoid the collapse of exchange rates and economic activity in the first place through crisis prevention.

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Cover IMF Support and Crisis Prevention
IMF Support and Crisis Prevention
ISBN:
9781589067097
ISSN:
0251-6365
Publication Date:
16 May 2008
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589067097.084
Pages:
33

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