The actions in this document aim at • Bringing the Fund’s framework for advice on capital flow policies up to date with recent research and lessons from experience. • Enhancing and coordinating a Fund-wide research • Ramping up the monitoring and analysis of capital flows. • Strengthening multilateral cooperation on policy issues affecting capital flows.
As noted in the report, the adoption of the IV represented a major advance in the IMF’s
policy framework to provide advice on capital account liberalization and the management
of capital flows. Before the adoption of the IV, there was no consistent framework to guide
policy advice on these areas. The IV was a major step towards filling the gap existing at the
time. It welcomed the economic benefits of capital flows while recognizing the risks
associated with capital flow volatility, developed a playbook for safe capital account
liberalization, and incorporated capital flow management measures (CFMs) into the policy
toolkit. It also noted the importance of international cooperation on capital flow policies in
allowing countries to harness the benefits of capital flows safely, while minimizing
negative spillovers. It was a demonstration of the institution’s flexibility and willingness to
embrace theoretical advances and lessons from experience.