Narrow Your Choices

Refine By Countries

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Business and Economics > Banks and Banking

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Integrated Policy Framework x
Clear All Modify Search
Cover IMF Working Papers
Foreign Exchange Intervention Under the Integrated Policy Framework: The Case of India
Jesper Lindé
,
Patrick Schneider
,
Nujin Suphaphiphat
, and
Hou Wang
This paper analyzes the effectiveness of foreign exchange intervention (FXI) in mitigating economic and financial shocks in India by applying the Integrated Policy Framework (IPF). It highlights how FXI can be a complementary tool in mitigating the tradeoff between output and inflation, specifically under large economic shocks amid temporarily shallow FX markets. The paper indicates that while FXI can soften adverse impacts on domestic demand and output during severe risk-off shocks, its benefits under normal conditions with liquid FX markets are limited.
Keywords:
Integrated policy framework; foreign exchange intervention; risk-off shocks; EM FX intervention proxy; RBI FX intervention; FX Market development; OTC FX turnover; rate Policy; Currency markets; Inflation; Central bank policy rate; Global
Cover IMF Staff Country Reports
Iceland: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper presents a pilot study on integrated policy framework (IPF) in Iceland. The IPF helps assess the appropriate policy responses to shocks for economies vulnerable to capital flow volatility, allowing for some market frictions. Iceland is an advanced economy pilot under the IPF with some of the frictions identified under the IPF framework. The Central Bank of Iceland implements an inflation targeting regime with the possibility of currency intervention within its mandate. The foreign exchange (FX) market in Iceland is assessed to be shallower than in other advanced economies, especially around episodes of global economic and financial stress. Foreign currency assets are mainly due to portfolio allocation of the large pension sector. The authorities should explore options to deepen the foreign currency derivatives market in a manner consistent with continued foreign exchange market stability. Iceland has a history of disruptive speculative foreign currency trading, which points to the need for moving cautiously with reforms to deepening the FX derivatives market. Reforms that could be explored include reassessing the limits on commercial banks’ derivative transactions. This would encourage greater participation of foreign investors in the domestic bond market and facilitate hedging of FX risk, thereby reducing the likelihood of disruptive exchange rate movements.
Keywords:
inflation expectation; FX Market shallowness; QIPF model; Iceland pilot study; staff team of the International Monetary Fund; Currency markets; Inflation; Central bank policy rate; Global