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Business and Economics > Banks and Banking

You are looking at 1 - 10 of 48 items for :

  • Type: Journal Issue x
  • Development Planning and Policy: Trade Policy; Factor Movement; Foreign Exchange Policy x
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Cover IMF Staff Country Reports
Morocco: Central Bank Transparency Code Review
International Monetary Fund. Monetary and Capital Markets Department
The Bank Al-Maghrib (BAM) has implemented expanded and comprehensive transparency practices in a number of areas, notably related to the primary mandate of price stability and the shared mandate of financial stability. This reflects the BAM’s public commitment to transparency anchored in the new 2019 BAM Law and articulated as a strategic orientation under the quinquennial plan for 2019-2023. This level of transparency enabled the BAM to gain the noteworthy trust of the stakeholders met by the mission and to safeguard its autonomy.
Keywords:
IMF central bank transparency code; IMF mission; bank-Al Maghrib; staff team of the International Monetary Fund; production assistance; Exchange rate arrangements; Exchange rate policy; Financial sector stability; Revenue administration transparency and accountability; Maghreb; Global
Cover IMF Working Papers
Legal Aspects of Central Bank Digital Currency: Central Bank and Monetary Law Considerations
Wouter Bossu
,
Mr. Masaru Itatani
, and
Arthur D. P. Rossi
This paper analyzes the legal foundations of central bank digital currency (CBDC) under central bank and monetary law. Absent strong legal foundations, the issuance of CBDC poses legal, financial and reputational risks for central banks. While the appropriate design of the legal framework will up to a degree depend on the design features of the CBDC, some general conclusions can be made. First, most central bank laws do not currently authorize the issuance of CBDC to the general public. Second, from a monetary law perspective, it is not evident that “currency” status can be attributed to CBDC. While the central bank law issue can be solved through rather straithforward law reform, the monetary law issue poses fundmental legal policy challenges.
Keywords:
Central Bank Digital Currency; CBDC; Blockchain; Cryptocurrency; Crypto assets; WP; central bank law; monetary unit; book money; digital currency; law reform; token-based CBDC; Central Bank digital currencies; Currencies; Central bank legislation; Legal support in revenue administration; Payment systems
Cover IMF Working Papers
Monetary Policy Under an Exchange Rate Anchor
Mariam El Hamiani Khatat
,
Mark Buessings-Loercks
, and
Mr. Vincent Fleuriet
This paper argues that there is scope for monetary policy under an exchange rate anchor, and discusses the related monetary policy design and implementation. It shows that the exchange rate can be used as the main monetary policy instrument while the policy rate can target the exchange rate. An exchange rate anchor is compatible with an inflation objective, provided fiscal dominance is not an issue, monetary conditions are supportive of the peg, and the level of international reserves is adequate. The paper argues that, while an exchange rate anchor is more prone to policy inconsistencies, there is ample scope for strengthening monetary policy design and implementation under soft pegs. In that context, the principles of dichotomy and interest rate parity are critical.
Keywords:
WP; exchange rate; interest rate; monetary policy; monetary policy framework; exchange rate regime; interest rate parity; monetary policy rules; monetary operations; foreign exchange interventions; policy stance; Singapore dollar; monetary policy rule; banking system; current account; exchange rate volatility; exchange rate band; monetary policy credibility; exchange rate policy stance; exchange rate appreciation; nominal exchange rate; Exchange rates; Exchange rate arrangements; Exchange rate anchor; Central bank policy rate; Exchange rate policy; Global; C. central bank monetary policy; monetary policy implementation
Cover Policy Papers
Transmittal Policy: The Exchange of Documents Between the Fund and Other Organizations
International Monetary Fund
history of exchanging documents with other international organizations and currency unions. The practice of exchanging documents with individual organizations dates back to the 1940s, mostly conducted through bilateral arrangements with other international organizations and currency unions. In 1990, the Fund introduced a framework (the “Transmittal Policy”) for the transmittal of certain Board documents (relating to Article IV consultations, use of Fund resources and, later, technical assistance). The Transmittal Policy has served the institution well, but some gaps have emerged over time. Many of the current bilateral document sharing arrangements were adopted in response to individual organizations’ requests, thus document sharing arrangements have not always been applied uniformly to similar organizations or kept pace with the mandates and needs of the organizations. This has resulted in similar organizations having uneven access to Fund documents. Moreover, the Fund’s Transparency Policy has also evolved and prompt publication of most Board documents is now the norm. The proposals set forth in this paper seek to ensure a consolidated, evenhanded approach to the transmittal of Fund documents to international organizations and currency unions. In particular, this paper proposes several changes that would allow international organizations and currency unions to receive a wider range of documents. This paper also presents a proposal responding to requests by Executive Directors of European Union (EU) countries to expand access to documents and information prior to Board consideration for the European Commission (EC). Staff proposes that access be granted uniformly to the EC and other executive bodies of currency unions that have executive decision-making power over the common economic and monetary policies of currency unions. There is also an interest in more expanded sharing of Fund documents with regional financing arrangements (RFAs) in view of their importance in the Global Financial Safety Net. However, given the unique structure of RFAs and the need to develop a policy framework suited for the needs of both the Fund and RFAs, a proposal for such sharing will be put forward in a separate paper for consideration by the Board.
Keywords:
PP; currency; executive director; central bank; country; executive body; currency union; union central banks; fund decision-making; flagship document; fund surveillance; ECB observer decision; ECB observer; fund decision; Monetary unions; Financial Sector Assessment Program; Currencies; Exchange rate policy; West Africa; Caribbean; Global
Cover IMF Working Papers
Floating with a Load of FX Debt?
Tatsiana Kliatskova
and
Mr. Uffe Mikkelsen
Countries with de jure floating exchange rate regimes are often reluctant to allow their currencies to float freely in practice. One reason why countries may wish to limit exchange rate volatility is potential negative balance sheet effects due to currency mismatches on the balance sheets of firms and households. In this paper, we show in a sample of 15 emerging market economies that countries with large foreign exchange (FX) debt in the non-financial private sector tend to react more strongly to exchange rate changes using both FX interventions and monetary policy. Thus, our results support the idea that an important source of “fear of floating” is balance sheet currency mismatches. This effect is asymmetric; that is, countries stem depreciation but not appreciation pressure. Moreover, FX debt financed through the domestic banking system is more important for fear of floating than FX debt obtained directly from external sources.
Keywords:
WP; FX debt; FX intervention; FX exposure; banking system FX lending; balance sheet mismatch; FX interventions; Monetary policy; Balance sheet effects; Exchange rates; Emerging markets; FX reserve; Exchange rate adjustments; Central bank policy rate; Exchange rate policy; Global
Cover IMF Working Papers
Frontiers of Monetary Policymaking: Adding the Exchange Rate as a Tool to Combat Deflationary Risks in the Czech Republic
Ali Alichi
,
Mr. Jaromir Benes
,
Mr. Joshua Felman
,
Irene Feng
,
Charles Freedman
,
Mr. Douglas Laxton
,
Mr. Evan C Tanner
,
David Vávra
, and
Hou Wang
The paper first describes how the Czech National Bank (CNB) moved gradually from a fixed exchange rate regime to the frontiers of Inflation-Forecast Targeting. It then focuses on the CNB’s recent experience in adding the exchange rate as a complementary monetary policy tool to stimulate the economy and combat the risks of deflation when the policy interest rate is at the zero lower bound. It assesses the theoretical basis of such a policy, the communications approach used by the CNB when announcing the new framework, and the effects thus far on inflation and output.
Keywords:
WP; interest rate; central bank; CNB policymaker; commitment of the CNB; transmission mechanism; Inflation-Forecast Targeting; Inflation Targeting; exchange rate tool; zero lower bound; forward guidance; deflation; central bank communications; interest rate path; CNB staff; forward-looking policymaking framework; Exchange rates; Inflation; Central bank policy rate; Exchange rate policy; Global
Cover Policy Papers
Modernizing the Legal Framework for Surveillance - An Integrated Surveillance Decision
International Monetary Fund
This paper proposes a draft Integrated Surveillance Decision (ISD) for adoption. As part of broader efforts to strengthen Fund surveillance, the Fund is modernizing its legal framework to better support operations. In April 2012, the Fund’s Executive Board discussed Modernizing the Legal Framework for Surveillance—Building Blocks Toward an Integrated Surveillance Decision. That paper highlighted key weaknesses in the current legal framework for surveillance and provided proposals for addressing them. Most Directors agreed that introducing a new surveillance decision covering both bilateral and multilateral surveillance would help address these weaknesses. In particular, they agreed with the general proposed approach to fill the gaps in bilateral surveillance through multilateral surveillance
Keywords:
PP; article IV; Policy advice; financial policy; balance of payments stability; policy adjustment
Cover Staff Discussion Notes
Two Targets, Two Instruments: Monetary and Exchange Rate Policies in Emerging Market Economies
Mr. Atish R. Ghosh
,
Mr. Jonathan David Ostry
, and
Mr. Marcos d Chamon
Staff Discussion Notes showcase the latest policy-related analysis and research being developed by individual IMF staff and are published to elicit comment and to further debate. These papers are generally brief and written in nontechnical language, and so are aimed at a broad audience interested in economic policy issues. This Web-only series replaced Staff Position Notes in January 2011.
Keywords:
SDN; inflation target; FX intervention; EME central banks; foreign exchange; inflationary bias; Policy response; Monetary Policy; Foreign Exchange Intervention; inflation-targeting EME; IT framework; EME inflation targeters; Exchange rates; Central bank policy rate; Capital inflows; Inflation targeting; Exchange rate policy; Global
Cover IMF Working Papers
International Reserves in Low Income Countries: Have they Served As Buffers?
International Monetary Fund
This paper provides a historical perspective on the role of international reserves in low-income countries as a cushion against large external shocks over the last three decades - including the current global crisis. The results suggest that international reserves have played a role in buffering external shocks, with the resulting macroeconomic costs varying with the nature of the shock, the economy's structural characteristics, and the level of reserves.
Keywords:
WP; cost; economy; loss; external shock; reserve
Cover IMF Working Papers
Optimal Precautionary Reserves for Low-Income Countries: A Cost-Benefit Analysis
Ms. Era Dabla-Norris
,
Mr. Jun I Kim
, and
Ms. Kazuko Shirono
This paper develops a cost-benefit approach that helps to quantify the optimal level of international reserves in low-income countries, focusing on the role of reserves in preventing and mitigating absorption drops triggered by large external shocks. The approach is applied to a sample of 49 LICs over the period 1980-2008 to yield estimates of the likelihood and severity of a crisis. The calibration results suggest that the standard metric of three months of imports is inadequate for countries with fixed exchange rate regimes. The results also highlight the role of overall policy frameworks and availability of Fund-support in determining optimal reserve levels, raising questions about the uniform applicability of standard rules of thumb across countries.
Keywords:
WP; optimal reserve; demand regression; commodity exporter; exchange rate regime; IMF program; precautionary reserves holding; Reserve adequacy; optimal level of reserves; low-income countries; opportunity cost; reserve coverage; cost-benefit framework; holdings reserve; Exchange rate arrangements; Conventional peg; Exchange rate flexibility; Imports; Reserve positions; Africa