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International Monetary Fund
This paper proposes the distribution of a portion of the Fund’s general reserve that is attributed to profits from recent Fund gold sales. The proposed distribution is part of a strategy endorsed by the Board in July 2009 involving the use of resources linked to gold sale profits to facilitate members’ contributions towards Poverty Reduction and Growth Trust (PRGT) subsidies. The strategy was formulated in the context of a comprehensive reform of the Fund’s Low Income Country (LIC) facilities and concessional financing framework approved by the Executive Board that included a financing package aimed at ensuring the PRGT’s capacity to lend concessional resources of up to SDR 11.3 billion ($17 billion) during the period 2009–14. The financing package included an agreement to raise SDR 1.5 billion in subsidy resources, of which SDR 0.5–0.6 billion (in end-2008 NPV terms) was expected to be generated from resources linked to profits from gold sales.
Mr. Slavi T Slavov
There are 22 countries in Sub-Saharan Africa (SSA) with floating exchange rate regimes, de jure. Some target the money supply or the inflation rate; others practice "managed floating." Statistical analysis on monthly data for the past decade reveals that in most cases these exchange rate regimes can be approximated surprisingly well by a soft peg to a basket dominated by the US dollar. The weight on the dollar appears to have fallen somewhat across the continent in the aftermath of the global financial crisis. Replicating the model with weekly data for The Gambia suggests that the focus on the dollar might be even more pronounced at higher data frequencies. While there might be strong arguments in favor of limiting exchange rate volatility in SSA countries, soft-pegging to the dollar does not appear to be the best fit for them, given the currency structure of their external trade and finance. The paper concludes by discussing some policy options for SSA countries with flexible exchange rates, in the context of an illustrative recent country case.
Mr. Montfort Mlachila and Ms. Misa Takebe
Despite the rapid increase in FDI flows to LICs, there have been relatively few studies that have specifically examined these flows. This paper attempts to partially fill the void by throwing light on one particularly dynamic aspect of global FDI-flows from Brazil, Russia, India and China (BRICs). The paper finds that official data sources undoubtedly underestimate the volume and scope of FDI flows as many small and medium-sized enterprises (SMEs) do not always register their investment. As a result, while it is difficult to estimate accurately the growth impact of BRIC FDI, there is case study evidence that it is increasingly significant. Second, while initial investment, mostly by state-owned companies, has often been destined for natural resource industries, over time, investment has been spreading to agriculture, manufacturing, and service industries (e.g., telecommunications). Third, FDI from BRICs flows into many non resource-rich countries in LICs and plays a significant role in growth in those countries.
Mr. Arto Kovanen
This paper reviews the reserve requirement arrangements of sub-Saharan Africa, focusing on the differences between reserve requirements on domestic- and foreign-currency deposits. The reserve requirement systems in sub-Saharan Africa are relatively simple and transparent, but in some countries high unremunerated reserve ratios impose a significant implicit tax on the banks. The currency denomination of the foreign-currency reserve deposits raises concern in countries undergoing large macroeconomic changes or experiencing exchange rate volatility.
International Monetary Fund. Secretary's Department


The speeches made by officials attending the IMF–World Bank Annual Meetings are published in this volume, along with the press communiqués issued by the International Monetary and Financial Committee and the Development Committee at the conclusion of the meetings.