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Business and Economics > Finance: General

You are looking at 1 - 10 of 627 items for :

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Cover High-Level Summary Technical Assistance Reports
Bhutan: Development of an Interest Rate Corridor Framework
Oleg Churiy
and
Bernard J Laurens
At the request of the Royal Monetary Authority of Bhutan (RMA), an IMF South Asia Regional Training and Technical Assistance Center (SARTTAC) visited Thimphu during August 20-29, 2024. The mission’s objectives were to assist the authorities in setting up interest rate corridor (IRC) and operationalizing the related instruments, operations, liquidity forecasting, and collateral frameworks.
Keywords:
Monetary policy; International organization; IMF South Asia Regional Training and Technical Assistance Center; capacity development recipient; staff capacity; high-level summary; money market development; Interest rate corridor; Open market operations; Liquidity forecasting; Liquidity management
Cover Technical Assistance Reports
Bhutan: Technical Assistance Report-Development of an Interest Rate Corridor Framework
International Monetary Fund. Asia and Pacific Dept
and
International Monetary Fund. Monetary and Capital Markets Department
In August 2024, at the request of the Royal Monetary Authority of Bhutan (RMA), the IMF South Asia Regional Training and Technical Assistance Center (SARTTAC) conducted a Technical Assistance (TA) mission in Thimphu. The mission aimed to assist the RMA in establishing an interest rate corridor (IRC) and operationalizing related instruments, liquidity forecasting, and collateral frameworks. The mission identified that the RMA lacks necessary monetary policy instruments to effectively address changing systemic liquidity conditions and financial stability challenges. It emphasized the need to move away from reliance on administrative controls, as the absence of appropriate price incentives reinforces the preference for foreign exchange among Bhutanese residents, increasing pressures on the peg. To tackle these issues, the mission proposed a phased approach to introduce the IRC. Initially, relevant external and internal documents should be finalized, followed by mock operations. The first phase involves introducing a one-week main Open Market Operation (OMO), conducted weekly at the policy rate with full allotment. Automatic access to the IRC's standing facilities should be ensured. Later, fixed-quantity, variable-rate OMOs should be utilized, relying on liquidity forecasting to calibrate operations. Additionally, the mission recommended reinstating sweeping arrangements for government accounts and enhancing coordination with the Treasury to improve liquidity forecasting. These measures aim to strengthen the RMA's operational framework and enhance the effectiveness of monetary policy.
Keywords:
Monetary policy; International organization; Bhutan.; RMA money market contact group; IMF South Asia Regional Training and Technical Assistance Center; IMF's Monetary; expert of the IMF Monetary; interest rate corridor framework; Liquidity management; Interest rate corridor; Liquidity; Commercial banks; Central bank policy rate
Cover Technical Assistance Reports
Republic of Azerbaijan: Technical Assistance Report-Modernizing Central Bank Communication
International Monetary Fund. Monetary and Capital Markets Department
This report presents an analysis of the Central Bank of the Republic of Azerbaijan's (CBA) communication framework and offers recommendations for enhancement. The technical assistance mission, led by the IMF Monetary and Capital Markets Department, aimed to modernize the CBA's communication strategies to align with international best practices. The findings indicate that while the CBA has made significant progress in external communications, there are areas for improvement, particularly in formalizing communication processes and enhancing message clarity. Recommendations include strengthening the role of the Communications Division, adopting a proactive communication policy, and improving the monetary policy communication cycle. These changes are expected to elevate the CBA's communication to a policy tool that supports its objectives of price and financial stability.
Keywords:
Central Bank; Communication; Monetary Policy; Transparency; Inflation Targeting; Stakeholders; Capacity Building; Policy Framework; Institutional Strategy; Communication Division; Azerbaijan.; CBA monetary policy press release; C. communications management; monetary policy department; B. Communication cycle; communication framework; CBA flagship policy publication; Monetary policy communication; Social networks; Financial sector stability; Central bank policy rate; Monetary policy frameworks; Global
Cover IMF Working Papers
A Confidence-Financial Inclusion Nexus in the Caucasus and Central Asia?
Kalin I Tintchev
and
Kady Keita
We document novel evidence that confidence in macrofinancial stability has a positive impact on financial inclusion in CCA countries and more broadly. This channel is particularly important for CCA countries, with confidence gains of 1 unit leading to 0.7 unit improvement in financial inclusion. Institutional factors such as level of governance and reliance on transparent policy rules and robust financial safety nets explain a large fraction of the variability in confidence in the region. We find that governance reforms are critical for deepening financial inclusion while the impact of inflation targeting, fiscal rules and deposit insurance schemes is positive and material only when governance levels exceed certain thresholds.
Keywords:
Financial inclusion; confidence; governance; inflation targeting; fiscal rules; deposit insurance; inclusion Nexus; governance reform; CCA country; governance level; governance gap; Fiscal rules; Financial sector development; Global; Central Asia and the Caucasus
Cover Annual Report on Exchange Arrangements and Exchange Restrictions 2023
Annual Report on Exchange Arrangements and Exchange Restrictions 2023
International Monetary Fund. Monetary and Capital Markets Department

Abstract

The AREAER provides a comprehensive description of restrictions on international trade and payments, capital controls, and measures implemented in the financial sector, including prudential measures that may affect capital flows for all IMF members. It also provides information on the classification of their exchange rate arrangements, operation of foreign exchange markets, restrictions on current international payments and transfers and multiple currency practices subject to the IMF’s jurisdiction in accordance with Article VIII. Descriptions of individual member countries are available at AREAER Online.

Keywords:
AREAER; exchange arrangements; monetary policy frameworks; Article VIII; Article XIV; exchange restrictions; multiple currency practices; import payments; export proceeds; current transfers; resident accounts; nonresident accounts; capital controls; prudential measures
Cover IMF Staff Country Reports
South Africa: Central Bank Transparency Code Review
International Monetary Fund. Monetary and Capital Markets Department
This paper focuses on South Africa’s Central Bank Transparency Code Review. The South African Reserve Bank (SARB’s) strategic commitment to open and transparent communications should be anchored in a more robust institutional communication framework. Communications about the SARB’s role in the reform of the Gold and Foreign Exchange Contingency Reserve Account settlement framework and the implications for its financial autonomy should be further clarified. The SARB’s monetary policy framework is comprehensive, transparent and understandable, but would benefit from greater transparency about setting the inflation target, policy deliberations, and alternative risk scenarios. The SARB has significantly increased the transparency and accountability of its monetary policy framework by adopting appropriate communications vehicles to reach different audiences and by publishing model-based forecasts. The SARB would also benefit from enhancing the transparency of well-established governance arrangements and policies in some areas. It is recommended to strengthen the transparency of certain aspects of the SARB’s legal structure and autonomy, by providing a general explanation of the SARB’s legal protections and its institutional and functional autonomy.
Keywords:
contingency reserve account; central bank Transparency Code; IMF mission; review mission; production assistance; Financial sector stability; Anti-money laundering and combating the financing of terrorism (AML/CFT); Monetary policy frameworks; International reserves; Inflation targeting; Africa; Global
Cover Policy Papers
Central Bank Digital Currency: Progress And Further Considerations
International Monetary Fund. Monetary and Capital Markets Department
The paper briefs the Executive Board on the further considerations on CBDC. These cover the positioning of CBDC in the payments landscape, cyber resilience of the CBDC ecosystem, CBDC adoption, CBDC data use and privacy protection, implications for monetary policy operations, and cross-border payments with retail CBDC.
Keywords:
Capacity development; CBDC; Central bank digital currencies; Adoption; Collaboration; Cross-border payments; Cyber resilience; Data use and privacy protection; Monetary operations; Payment systems; Positioning CBDC; CBDC data; CBDC system; CBDC adoption; CBDC design; data use; position CBDC vis-à-vis; Digital financial services; Monetary base; Global
Cover Technical Assistance Reports
Bangladesh: Technical Assistance Report-Interest Rate Corridor Adoption
International Monetary Fund. Asia and Pacific Dept
In August 2023, the IMF South Asia Regional Training and Technical Assistance Center (SARTTAC) undertook a Technical Assistance (TA) Mission at Bangladesh Bank (BB) to advise on the shift from a reserve money targeting monetary policy framework to an interest rate-focused one. This transition, announced by BB for July-December 2023, marks a significant policy shift, and it provides an opportunity to realign BB's governance and operational frameworks with the new monetary policy framework. Crucial to this transition is the amendment of the Bangladesh Bank Order (BBO) to give priority to price stability as the objective of monetary policy, to enhance BB's autonomy and accountability, and to eliminate direct BB lending to priority sectors. These modifications aim to align the governance structure with the objectives of the updated monetary policy framework. The mission suggested several key adjustments to the operational framework, including the implementation of a weekly 7-day Open Market Operation (OMO) at the policy rate; an increase in Cash Reserve Ratio (CRR) averaging; automatic access to Standing Facilities (SFs), and the harmonization of the legal framework for collateralized liquidity-providing monetary operations. Additionally, the mission proposed future measures to improve short-term liquidity forecasting and interbank market trading. Supportive measures were also recommended, such as normalizing the foreign exchange market with a clear exchange rate policy; engaging in money market development initiatives; participating in the Local Bond Market development project; and revising BB’s communications policy to enhance transparency. These reforms are designed to improve monetary policy transmission so as to support the achievement of BB’s its primary mandate of price stability, as a prerequisite for macroeconomic stability and stable economic growth.
Keywords:
Monetary policy; International organization; Bangladesh.; IMF South Asia Regional Training and Technical Assistance Center; SARTTAC Monetary; in-person Technical Assistance; IMF's Monetary; Bangladesh Bank order; reference rate; Central bank policy rate; Open market operations; Monetary policy frameworks; Liquidity; Liquidity forecasting
Cover IMF Staff Country Reports
Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Climate Risk Analysis
International Monetary Fund. Monetary and Capital Markets Department
This paper presents a technical note on climate risk analysis in The Netherlands. The Netherlands is exposed to both physical and transition risks from climate change. This Financial Sector Assessment Program FSAP analyzed potential risks to financial stability posed by physical risks from floods and transition risks from nitrogen. In order to assess physical climate risks, bank stress tests were conducted against flood events under a range of scenarios encompassing diverse regions, climate conditions, and flood protection reinforcement plans with different return periods. Despite the sizeable land area in the Netherlands susceptible to flooding, the physical climate stress test has demonstrated that the banking sector exhibits resilience to flood events. As the government’s efforts to reduce nitrogen depositions continue, the banking sector could face transition risks through the credit channel, particularly if loans are extended to financially vulnerable firms in high nitrogen-emitting sectors. The Dutch government should strengthen data sharing and collaboration with floods and climate experts. Flood scenarios designed with detailed flood maps under future climate conditions would provide a more accurate assessment of both climate change impact and adaptation measures.
Keywords:
risk analysis; statistics Netherlands; flood scenario design scheme; types classification; B. flood scenario; nitrogen emission intensity; Natural disasters; Climate change; Insurance companies; Commercial banks; Global
Cover IMF Staff Country Reports
Kingdom of the Netherlands-The Netherlands: Financial Sector Assessment Program- Technical Note on Securities Regulation and Supervision
International Monetary Fund. Monetary and Capital Markets Department
This paper describes a technical note on securities regulation and supervision in The Netherlands. Regulation of securities and derivatives markets in the European Union (EU) has changed materially since the last Netherlands Financial Sector Assessment Program (FSAP), with further reforms underway. The securities market landscape in the Netherlands has also changed markedly since the last FSAP, largely in response to Brexit. The Netherlands is now of EU-wide significance in relation to the trading of securities, particularly equities, which has brought challenges for the national authorities. Further enhancements of its approach and a continuing focus on trading system operational resilience are now needed. The established venues are growing and diversifying their offerings, and ‘fintech’ new entrants with business models combining trading and post-trading operations in new ways are on the horizon. Enhancements to the legislative framework are now needed to ensure that the Autoriteit Financiële Markten can continue to supervise efficiently and effectively an expanded and more diverse market, and to engage credibly with international counterparts.
Keywords:
trading venue; managers directive; markets authority; trading obligation; money market funds; Financial Sector Assessment Program; Liquidity management; Liquidity; Liquidity risk; Financial derivatives; Europe; Global