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You are looking at 11 - 20 of 99,786 items

Cover IMF Working Papers
Currency Usage for Cross Border Payments
Hector Perez-Saiz
,
Ms. Longmei Zhang
, and
Roshan Iyer
While the global usage of currencies other than the U.S. dollar and the euro for cross-border payments remains limited, rapid technological (e.g. digital money) or geopolitical changes could accelerate a regime shift into a multipolar or more fragmented international monetary system. Using the rich Swift database of cross-border payments, we empirically estimate the importance of legal tender status, geopolitical distance, and other variables vis-à-vis the large inertia effects for currency usage, and perform several forecasting simulations to better understand the role of these variables in shaping the future payments landscape. While our results suggest a substantially more fragmented international monetary system would be unlikely in the short and medium term, the impact of new technologies remains highly uncertain, and much more rapid geopolitical developments than expected could accelerate the transformation of the international monetary system towards multipolarity.
Keywords:
Cross border payments; Swift; currency dominance; legal tender; international monetary system (IMS)
Cover IMF Working Papers
Fragmentation in Global Trade: Accounting for Commodities
Marijn A. Bolhuis
,
Mr. Jiaqian Chen
, and
Benjamin R Kett
We construct a new database which covers production and trade in 136 primary commodities and 24 manufacturing and service sectors for 145 countries. Using this new more granular data, we estimate spillover effects from plausible trade fragmentation scenarios in a new multi-country, multi-sector, general-equilibrium model that accounts for unique demand and supply characteristics of commodities. The results show fragmentation-induced output losses can be sizable, especially for Low-Income-Countries, although the magnitudes vary according to the particular scenarios and modelling assumptions. Our work demonstrates that not accounting for granular commodity production and trade linkages leads to underestimation of the output losses associated with trade fragmentation.
Keywords:
Commodities; international trade; sanctions; spillovers; fragmentation
Cover IMF Working Papers
European Housing Markets at a Turning Point – Risks, Household and Bank Vulnerabilities, and Policy Options
Ms. Laura Valderrama
,
Patrik Gorse
,
Ms. Marina Marinkov
, and
Petia Topalova
European housing markets are at a turning point as the cost-of-living crisis has eroded real incomes and the surge in interest rates has made borrowers more vulnerable to financial distress. This paper aims to (i) shed light on the risks in European housing markets, (ii) quantify household vulnerabilties, (iii) assess banking sector implications and (iv) examine policies’ effectiveness using simulations based on microdata from the Household Finance and Consumption Survey (HFCS) and EU statistics on income and living conditions (EU-SILC). Under the baseline IMF macroeconomic forecast, the share of households that could struggle to meet basic expenses could rise by 10 pps reaching a third of all households by end 2023. Under an adverse scenario, 45 percent of households could be financially stretched, representing over 40 percent of mortgage debt and 45 percent of consumer debt. The impact on the banking sector seems contained under the baseline forecast, though there are pockets of vulnerability. A 20 percent house price correction could deplete CET1 capital by 100-300 basis points. Fiscal measures, such as subsidies to the bottom income tercile, could save 7 percent of households from financial distress at an estimated cost of 0.8 percent of GDP.
Keywords:
Housing markets; overvaluation; affordability; household vulnerability; tenure status; income distribution; consumption; financial stability; targeted support; macroprudential policy.
Cover IMF Working Papers
Policy Responses to High Energy and Food Prices
David Amaglobeli
,
Mengfei Gu
,
Emine Hanedar
,
Mr. Gee Hee Hong
, and
Celine Thevenot
The surge in energy and food prices, which was amplified by Russia’s invasion of Ukraine, has prompted a flurry of policy responses by countries during 2022. The aim of these policy responses was to mitigate social and economic impact of higher prices. In this paper we document announcements of policy measures based on the Database of Energy and Food Price Actions (DEFPA), which was developed based on two rounds of survey responses of IMF country teams conducted in March/April and June/July of 2022. The paper also provides discussion on policy trade-offs when considering appropriate policy responses both for countries with strong and weak social safety nets. Key policy message is that providing targeted support to households in the form of cash transfers is the most cost-effective way of alleviating the burden on vulnerable households and have to be preferred over broad-based mechanisms that prevent international prices to pass through to domestic consumers.
Keywords:
Energy prices; food Prices; cost of living; social policy
Cover IMF Working Papers
Calibrating Macroprudential Policies in Europe Amid Rising Housing Market Vulnerability
Ms. Laura Valderrama
Housing market developments are in the spotlight in Europe. Over-stretched valuations amid tightening financial conditions and a cost-of-living crisis have increased risks of a sustained downturn and exposed challenging trade-offs for macroprudential policy between ensuring financial system resilience and smoothing the macro-financial cycle. Against this backdrop, this paper provides detailed considerations regarding how to (re)set macroprudential policy tools in response to housing-related systemic risk in Europe, providing design solutions to avoid unintended consequences during a tightening phase, and navigating the trade-offs between managing the build-up of vulnerabilities and the macro-financial cycle in a downturn. It also proposes a novel framework to measure the effectiveness of tools and avoid overlaps by quantifying the risks addressed by different macroprudential instruments. Finally, it introduces a taxonomy allowing to assess a country’s macroprudential stance and whether adjustments to current policy settings are warranted—such as the relaxation of capital-based tools and possibly some borrower-based measures in the event of a more severe downturn.
Keywords:
Housing markets; household vulnerability; income distribution; economic cycle; financial stability; macroprudential policy.
Cover Policy Papers
Implementation Plan in Response to the Board-Endorsed Recommendations from the IEO Evaluation Report on IMF Engagement with Small Developing States
International Monetary Fund

This paper presents a Management Implementation Plan (MIP) with actions to take forward the Board-endorsed recommendations from the Independent Evaluation Office (IEO)’s report on IMF Engagement with Small Developing States (SDS). The actions in the MIP are broad in scope, touching on all modalities of the Fund’s engagement with SDS, and seek to be comprehensive, self-reinforcing, cost-effective, and designed to be adopted as a package. The MIP aims to support a targeted and effective recalibration of engagement with SDS; enhance IMF’s surveillance and capacity development in SDS members; strengthen the Fund’s lending engagement with SDS, in line with the applicable policy frameworks; and secure an effective, well-tailored and more continuous staff presence in SDS.

Keywords:
SDS staff guidance note; SDS authority; SDS staff analytics; SDS-SWG report; SDS peer-learning
Cover Policy Papers
Implementation Plan in Response to the Board-Endorsed Recommendations from the IEO Evaluation Report on IMF Engagement with Small Developing States
International Monetary Fund
This paper presents a Management Implementation Plan (MIP) with actions to take forward the Board-endorsed recommendations from the Independent Evaluation Office (IEO)’s report on IMF Engagement with Small Developing States (SDS). The actions in the MIP are broad in scope, touching on all modalities of the Fund’s engagement with SDS, and seek to be comprehensive, self-reinforcing, cost-effective, and designed to be adopted as a package. The MIP aims to support a targeted and effective recalibration of engagement with SDS; enhance IMF’s surveillance and capacity development in SDS members; strengthen the Fund’s lending engagement with SDS, in line with the applicable policy frameworks; and secure an effective, well-tailored and more continuous staff presence in SDS.
Keywords:
Capacity development; climate; lending; policy frameworks; training; small developing states; staffing; surveillance; SDS staff guidance note; SDS member; SDS-SGN update; presence in SDS; IMF's transparency policy; Climate change; Budget planning and preparation; Financial sector; Caribbean; Global; Central America
Cover IMF Staff Country Reports
Colombia: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Colombia
International Monetary Fund. Western Hemisphere Dept.

1. A new administration has been elected with a mandate to improve equity and diversify Colombia’s economy. On the back of strong social demands, President Petro took office in August 2022, marking a shift in domestic politics. The new administration’s agenda is centered on reducing inequality and transitioning towards a greener and more diversified economy. Despite a strong track record of macroeconomic stability and economic growth, income inequality and labor market informality remain elevated, and gaps persist in the access to healthcare, education, and social safety net coverage. Meanwhile, the economy’s dependency on oil and gas has grown over the past decade—representing 56 percent of total exports and the bulk of energy produced for domestic consumption (see accompanying Selected Issues Paper, SIP).

Keywords:
Colombian peso; coverage ratio; GDP deflator; market failure; potential GDP; Fiscal stance
Cover IMF Staff Country Reports
Colombia: Selected Issues
International Monetary Fund. Western Hemisphere Dept.

Following a series of supply-side shocks, unprecedented policy stimulus, and a sharp recovery in economic activity after the pandemic, inflation rose above central bank targets in many economies around the globe, including Colombia. Amid a more challenging external backdrop and increasing monetary policy tradeoffs, this note explores the role that fiscal policy can play to support monetary policy in addressing inflationary pressures without unduly dampening growth. The empirical analysis and calibrated model suggest that fiscal policy can play a critical in role in tackling inflation, with important welfare enhancing implications.

Keywords:
inflation expectation; monetary policy response; monetary policy tradeoff; central bank target; Inflation; Fiscal rules
Cover IMF Staff Country Reports
Colombia: Staff Report for the 2023 Article IV Consultation—Informational Annex
International Monetary Fund. Western Hemisphere Dept.

COLOMBIA

Keywords:
liability positions vis-à-vis nonresident; IMF Sta; financing datum; Colombian peso; exchange arrangement; External sector statistics; Government finance statistics; Financial statistics; Financial soundness indicators