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Western Hemisphere > Argentina

You are looking at 1 - 10 of 97 items for :

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Cover Policy Papers
Review of the Adequacy of the Fund’s Precautionary Balances
International Monetary Fund. Finance Dept.
On March 20, 2024, the IMF’s Executive Board reviewed the adequacy of the Fund’s precautionary balances. The review took place somewhat ahead of the standard two-year cycle, in view of the imminent attainment of the current indicative medium-term indicative target of SDR 25 billion for the first time. Precautionary balances comprise the Fund’s general and special reserves. They are a key element of the IMF’s multi-layered framework for managing financial risks. Precautionary balances provide a buffer to protect the Fund against potential losses, resulting from credit, income, and other financial risks. The review was based on the assessment framework established in 2010, which uses an indicative range for precautionary balances, linked to a forward-looking measure of total IMF non-concessional credit, to guide decisions on adjusting the medium-term target over time. While financial risks remain high, they are broadly unchanged from the last review, taking into account the further accumulation of reserves and strengthening of some risk mitigants. Against this background, Executive Directors broadly supported staff’s proposal to retain the current medium-term target of SDR 25 billion and increase the minimum floor from SDR 15 billion to SDR 20 billion. The Board also supported maintaining the biennial review cycle, with earlier reviews if warranted by developments that could materially affect the adequacy of precautionary balances.
Keywords:
Non-concessionary; Lending; Risks; Reserves; Credit; Mitigation; Provisioning; management framework; income risk; concentration risk; Fund credit; I. financial risks; demand scenario; lending portfolio; Credit risk; Income; Capital adequacy requirements; Market risk; Global
Cover IMF Working Papers
Financial Stress and Economic Activity: Evidence from a New Worldwide Index
Hites Ahir
,
Mr. Giovanni Dell'Ariccia
,
Davide Furceri
,
Mr. Chris Papageorgiou
, and
Hanbo Qi
This paper uses text analysis to construct a continuous financial stress index (FSI) for 110 countries over each quarter during the period 1967-2018. It relies on a computer algorithm along with human expert oversight and is thus easy to update. The new indicator has a larger country and time coverage and higher frequency than similar measures focusing on advanced economies. And it complements existing binary chronologies in that it can assess the severity of financial crises. We use the indicator to assess the impact of financial stress on the economy using both country- and firm-level data. Our main findings are fivefold: i) consistent with existing literature, we show an economically significant and persistent relationship between financial stress and output; ii) the effect is larger in emerging markets and developing economies and (iii) for higher levels of financial stress; iv) we deal with simultaneous causality by constructing a novel instrument—financial stress originating from other countries—using information from the text analysis, and show that, while there is clear evidence that financial stress harms economic activities, OLS estimates tend to overestimate the magnitude of this effect; (iv) we confirm the presence of an exogenous effect of financial stress through a difference-in-differences exercise and show that effects are larger for firms that are more financially constrained and less profitable.
Keywords:
Financial stress; text analysis; country reports; continuous indicator; country and firm economic activity.; firm economic activity; effect of FSI; financial crises episode; Financial soundness indicators; Banking crises; Reserve requirements; Global financial crisis of 2008-2009; Global
Cover IMF Staff Country Reports
Paraguay: Selected Issues
International Monetary Fund. Western Hemisphere Dept.
This Selected Issues paper investigates the reasons for the growth pickup in Paraguay and explores the potential for sustainable future growth. It shows that the growth acceleration over the past 15 years is the combined result of a few factors: a bounce back from the crisis in the late 1990s and the subpar growth of the two decades prior; a benevolent external environment, the commodity price boom in particular; and the improved macroeconomic stability. Also in terms of its composition, growth in the past has largely been extensive, mostly coming from capital deepening and increasing labor inputs, rather than productivity increase, though total factor productivity growth has played a bigger role in the most recent years. Despite strong growth in recent years, like most of the Latin America, seen over a longer period, Paraguay has not attained significant economic convergence with advanced economies. Empirical data shows a strong linkage between the GDP per capita of a country and its score in a composite structural indicator such as the World Competitiveness Index, which Paraguay ranked poorly on. Identifying and correcting Paraguay’s structural deficiencies that may be hampering productivity growth and capital accumulation will be crucial for sustainable growth.
Keywords:
ISCR; CR; Paraguay; IMF staff calculation; GDP; credit growth; dollar-denominated credit; commodity price boom; IMF staff estimate; Credit; Credit booms; Exports; Agricultural prices; Commodity prices; Global; Western Europe; Europe
Cover Global Financial Stability Report, October 2018
Global Financial Stability Report, October 2018
A Decade after the Global Financial Crisis: Are We Safer?
International Monetary Fund. Monetary and Capital Markets Department

Abstract

In the 10 years since the global financial crisis, regulatory frameworks have been enhanced and the banking system has become stronger, but new vulnerabilities have emerged, and the resilience of the global financial system has yet to be tested.

Keywords:
GFSR; financial condition; market liquidity; emerging market economy; IMF executive board discussion summary; risk; a number of emerging market economies; debt vulnerability; foreign exchange; inflation surprise; Emerging and frontier financial markets; Financial sector stability; Global financial crisis of 2008-2009; Financial Sector Assessment Program; Bank resolution framework; Global; Asia and Pacific; Africa; Middle East; financial system; commercial paper; FSAP risk analysis finding; volatility Index; U.S. dollar; international community; Systemic risk; Caribbean
Cover IMF Working Papers
A Primer on Managing Sovereign Debt-Portfolio Risks
Thordur Jonasson
and
Mr. Michael G. Papaioannou
This paper provides an overview of sovereign debt portfolio risks and discusses various liability management operations (LMOs) and instruments used by public debt managers to mitigate these risks. Debt management strategies analyzed in the context of helping reach debt portfolio targets and attain desired portfolio structures. Also, the paper outlines how LMOs could be integrated into a debt management strategy and serve as policy tools to reduce potential debt portfolio vulnerabilities. Further, the paper presents operational issues faced by debt managers, including the need to develop a risk management framework, interactions of debt management with fiscal policy, monetary policy, and financial stability, as well as efficient government bond markets.
Keywords:
WP; interest rate; exchange rate risk; debt manager; Public Debt Management; Financial Risk; Foreign Exchange Hedging; Government Securities Markets; foreign currency; short-term debt; debt portfolio; borrowing cost; portfolio risk; bond issue; Government debt management; Debt management; Bonds; Credit risk; Global
Cover IMF Staff Country Reports
Paraguay: 2017 Article IV Consultation-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
Paraguay’s macroeconomic performance has been robust. For the expansion to be durable, however, it needs to continue broadening to more sectors and be more inclusive. The recovery in key partners remains uncertain, while domestic risks include weather-related shocks and ongoing adjustments in banks’ balance sheets. Strengthening institutions and closing infrastructure gaps is essential to overcome challenges to faster income convergence and more inclusive growth.
Keywords:
ISCR; CR; outturn; central bank; Inter-American Development Bank; Paraguay
Cover IMF Staff Country Reports
Paraguay: 2017 Article IV Consultation-Press Release and Staff Report
International Monetary Fund. Western Hemisphere Dept.
This 2017 Article IV Consultation highlights that Paraguay has grown robustly despite a more challenging external environment. The economy gained momentum toward the end of 2016 and expanded by 6.5 percent (year-over-year) during the first quarter of 2017. Real GDP growth is projected to reach 4.2 percent in 2017, reflecting a more moderate pace of activity in the second half of the year. Investment will likely be a crucial driver of growth, as major infrastructure projects are undertaken. Over the medium term, real GDP growth is expected to remain near potential of just below 4 percent. Risks around the outlook are to the downside, especially from heightened political uncertainty in Brazil.
Keywords:
ISCR; CR; outturn; central bank; Inter-American Development Bank; Paraguay; credit growth; credit dollarization; central bank of Paraguay; IADB Paraguay; monetary policy rate; CPI index; Credit; Basel Core Principles; Central bank policy rate; Global
Cover Policy Papers
State-Contingent Debt Instruments for Sovereigns
International Monetary Fund
Background. The case for sovereign state-contingent debt instruments (SCDIs) as a countercyclical and risk-sharing tool has been around for some time and remains appealing; but take-up has been limited. Earlier staff work had advocated the use of growth-indexed bonds in emerging markets and contingent financial instruments in low-income countries. In light of recent renewed interest among academics, policymakers, and market participants—staff has analyzed the conceptual and practical issues SCDIs raise with a view to accelerate the development of self-sustaining markets in these instruments. The analysis has benefited from broad consultations with both private market participants and policymakers. The economic case for SCDIs. By linking debt service to a measure of the sovereign’s capacity to pay, SCDIs can increase fiscal space, and thus allow greater policy flexibility in bad times. They can also broaden the sovereign’s investor base, open opportunities for risk diversification for investors, and enhance the resilience of the international financial system. Should SCDI issuance rise to account for a large share of public debt, it could also significantly reduce the incidence and cost of sovereign debt crises. Some potential complications require mitigation: a high novelty and liquidity premium demanded by investors in the early stage of market development; adverse selection and moral hazard risks; undesirable pricing effects on conventional debt; pro-cyclical investor demand; migration of excessive risk to the private sector; and adverse political economy incentives.
Keywords:
PP; State-Contingent Debt instrument; investor; issuer; benchmark design; market development; real GDP; foreign currency; interest rate; debt service; Bonds; Sovereign bonds; Securities; Currencies; Global
Cover The International Monetary Fund and the Learning Organization
The International Monetary Fund and the Learning Organization
The Role of Independent Evaluation
Moisés J. Schwartz
and
Ray C. Rist

Abstract

The benefits of independent evaluation in international financial institutions have long been recognized. However, independent evaluation in these organizations is of increased relevance during uncertain times that call for more credible and legitimate institutions. While evaluation has long played a function in the IMF, and its role has expanded substantially with the creation of the IEO, independent evaluation has yet to take on a role within the IMF that fully reflects its potential contribution. A strong global economy requires a strong IMF, and a strong IMF requires a strong independent evaluation culture and practice. The establishment of the IEO was only the start of a process that still needs to be fostered and cultivated. Successful independent evaluation is important for the IMF to be perceived as legitimate and credible—and to achieve it, the independent evaluation function needs to be further integrated in the learning process and culture of the Fund. Independent evaluation has played a significant role in contributing to the improvement of the IMF, but the pending challenge is for the IMF and the IEO to create a shared culture that fully embraces the purpose and mission of the IEO, and the learning opportunities offered by independent evaluation. The IMF’s organizational culture has a profound role to play in prompting actions to make learning from independent evaluation a more vibrant element of the Fund’s activities. This book calls on IMF management to take a more active role in instilling the positive value of independent evaluation across the organization and thus enabling independent evaluation to bring the IMF closer to what the literature defines as the ideal of a “learning organization.”

Keywords:
BOOK; evaluation; IEO; organization; IEO report; IEO evaluation; learning organization; evaluation report; IEO recommendation; Poverty reduction strategy; Trade policy; Public sector; Financial Sector Assessment Program; Global; Sub-Saharan Africa; East Asia; evaluation function; Exchange rate policy; Internal audit; Caribbean
Cover Policy Papers
Amendment to Steps to Address Excessive Delays in the Completion of Article IV Consultations or Mandatory Financial Stability Assessments and Application to the Case of Argentina
International Monetary Fund
Management has received a request from the Argentine authorities to publish documents on economic developments in the country prepared by Fund staff for informal Board briefings in 2013–15. The Argentine authorities see publication of these papers as part of their commitment to transparency and accountability in their operations. The documents were prepared pursuant to the Fund’s policy on excessive delays in the completion of Article IV consultations and mandatory financial stability assessments, which requires that staff informally brief Executive Directors every 12 months on the economic developments and policies of relevant members. The objectives of the policy are to promote re-engagement with members with excessively delayed consultations, and to share information with the Board to help it fulfill its surveillance function. Under current policy, the briefing documents are not published. Instead, a short factual statement is issued in a press release, noting that the Board was given an informal staff briefing on the member’s economy based on available information. Under the policy, the Fund decided against publication of the briefing documents since it was considered that publication could expose the Fund to a significant reputational risk if the analysis set out in the documents missed key vulnerabilities due to large information gaps created by the lack of consultation with the member. Also, outside audiences may not appreciate that the documents represent the views of staff, not the views of the Board, and do not constitute an Article IV consultation. A further concern was that publication could reduce the pressure on members to proceed with an Article IV consultation. In light of the current policy, any publication of these documents would require a change in policy approved by the Executive Board
Keywords:
PP; publication; briefing; member requests publication; briefing document; request; fund staff; staff briefing; fund's policy; Financial stability assessment; Development policy; Financial sector policy; transparency policy