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Asia and Pacific > India

You are looking at 1 - 10 of 331 items for :

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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 High-Level Summary Technical Assistance Reports
India: Review and Evaluation of the Reserve Bank of India’s Stress Test Model Framework
Marco Gross
and
Wei Sun
This report provides a brief summary of the purpose and findings of a technical assistance (TA) mission that was intended to review and evaluate the Reserve Bank of India (RBI)’s stress test model suite, which took place in April 2023. The RBI’s model suite was found to be strong and well developed in numerous respects. The most noteworthy recommendations pertain to credit risk, market risk, and macro-financial scenario design. A detailed list of 28 recommendations spanning all areas was left with the RBI. A detailed TA report accompanies this brief summary report.
Keywords:
Bank solvency risk analysis; liquidity risk analysis; contagion analysis; stress test model framework; IMF team; RBI's model suite; TA mission; summary report; Stress testing; Market risk
Cover Technical Assistance Reports
India: Technical Assistance Report-Review and Evaluation of the Reserve Bank of India’s Stress Test Model Framework
International Monetary Fund. Monetary and Capital Markets Department
This report summarizes the content and findings of a technical assistance (TA) mission that was reviewing and evaluating the Reserve Bank of India (RBI)’s stress test model suite. The RBI’s model suite was found to be strong and well developed in numerous respects. The most noteworthy recommendations pertain to credit risk, market risk, and macro-financial scenario design. A detailed list of recommendations spanning all areas was left with the RBI.
Keywords:
Bank solvency risk analysis; liquidity risk analysis; contagion analysis; India.; IMF TA mission member; CD recipient; revaluation calculation; stress test model framework; executive director Dr. O. P. Mall; Stress testing; Market risk; Credit risk; Nonperforming loans; Credit; Global
Cover IMF Staff Country Reports
Bhutan: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Bhutan
International Monetary Fund. Asia and Pacific Dept
The 2024 Article IV Consultation highlights that Bhutan achieved significant improvements in social conditions during the last decade, raising living standards. Poverty and inequality have declined, while extreme poverty has been eliminated. Growth is projected to accelerate over the medium term as a large hydro-project is commissioned and capital spending is boosted with the support of external grants. Pull factors are expected to slow down emigration, thereby reducing pressures on the supply side. A gradual fiscal consolidation based on revenue mobilization and accompanied by some spending restraint is needed to increase fiscal space and to reduce reliance on external grants in the longer term. Structural policies should focus on fostering high-quality private sector jobs, as well as diversifying exports. There is scope to strengthen the Royal Monetary Authority’s governance framework, as well as to step up anti-money laundering/countering the financing of terrorism efforts. Improvements in data quality have been significant, but further actions are needed to address remaining weaknesses. These include a need for greater transparency on crypto assets operations.
Keywords:
FDI company; foreign exchange resource; cover loan restructuring; capital investment; IMF team; Global
Cover IMF Working Papers
Determinants of Zombie Banks in Emerging Markets and Developing Economies
Torsten Wezel
,
Hannah Sheldon
, and
Zhengwei Fu
While deeply undercapitalized banks have been shown to misallocate credit to weak firms, the drivers of such zombie banks are less researched, particularly across countries. To furnish empirical evidence, we compile a dataset of undercapitalized banks from emerging markets and developing economies. We classify zombie banks as those not receiving remedial treatment by owners or regulators or, alternatively, remaining chronically undercapitalized. Using logit regressions, we find that country-specific factors are more influential for zombie status than bank characteristics, alhough some become significant when disaggreating by region. The paper’s overall findings imply the need for a proper regulatory framework and an effective resolution regime to deal with zombie banks more decisively.
Keywords:
Banks; Capital Requirements; Financial Crises; summary statistics; zombie bank; zombie share; zombie status; equity ratio; Banking crises; Bank resolution; Credit; Asia and Pacific; Global; Europe; Africa
Cover FinTech Notes
Central Bank Digital Currency's Role in Promoting Financial Inclusion
Ashley Lannquist
and
Brandon Tan
Financial inclusion is a key policy objective that central banks, especially those in emerging and low-income countries, are considering for retail central bank digital currency (CBDC). If properly designed to address the barriers to financial inclusion, CBDCs have the opportunity to gain acceptance by the financially excluded for digital payments. CBDC can then serve as an entry point to the broader formal financial system. CBDC has special aspects that may benefit financial inclusion, such as being a risk-free and widely acceptable form of digital money, availability for offline payments, and potentially lower costs and greater accessibility. However, CBDC is not a panacea to financial inclusion, and additional experience is needed to fully understand its potential impact.
Keywords:
Central bank digital currency; financial inclusion; digital inclusion; digital payments; central bank digital currency's role; IMF Fintech Note 2023/011; IMF Library; publication order; publications service; Central Bank digital currencies; Digital financial services; Payment systems; Global; Sub-Saharan Africa
Cover IMF Staff Country Reports
Suriname: Second Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for Rephasing and Reduction of Access, Waivers of nonobservance of Performance Criteria and Financing Assurances Review-Press Release; Staff Report; Staff Supplement; Staff Statement; and Statement by the Executive Director for Suriname
International Monetary Fund. Western Hemisphere Dept.
This paper presents Suriname’s Review under the Extended Arrangement under the Extended Fund Facility, Requests for Rephasing and Reduction of Access, Waivers of Nonobservance of Performance Criteria (PC), and Financing Assurances Review. The authorities have made concerted efforts to bring their economic recovery program back on track and stabilize the economy, foremost by restoring fiscal discipline, while expanding social assistance programs to protect the poor. They have also reached important milestones in debt restructuring negotiations, which, alongside fiscal consolidation, will support Suriname’s efforts to restore debt sustainability. The end-December 2022 quantitative performance criteria on the cumulative central government primary balance and net domestic assets were missed. Two continuous PCs and one standard continuous PC were also breached. Progress on implementing the structural agenda has moved ahead but with delays. The authorities are continuing to make progress with their structural reform agenda. Structural reforms to strengthen institutions, governance, and data quality remain key priorities with continued capacity building support by IMF and Suriname’s other development partners.
Keywords:
roadmap triage; staff appraisal; governance reform of bank; government FX sale; sales transaction; Exchange rates; Multiple currency practices; Arrears; Caribbean; Global
Cover IMF Staff Country Reports
Nepal: Selected Issues
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper utilizes a new macro-model capturing food insecurity, migration and trade in Nepal. It shows that low yields and remoteness explain a majority of the difference in prevalence of food insecurity across districts in Nepal; both climate shocks and persistent climate-change increase food insecurity and disproportionately harm the most vulnerable; and lower wages in migrant destinations would reduce remittances, increase food insecurity and lower welfare. The paper then presents and quantifies a number of potential policies to address these issues. The paper quantifies the impact of a number of policy options (cash transfers, better infrastructure, and improved agricultural productivity) to address food insecurity and climate change. In addition to climate shocks, persistent climate change will lower welfare, increase food insecurity, and migration. Given the model results show that agricultural productivity is a key determinant of food security, Nepal can learn from other countries policies including in agricultural extension, improved community water management techniques, and climate resilient agriculture in line with the National Adaptation Plan.
Keywords:
food insecurity in Nepal; NAC's risk rating; migration cost; remittances in Nepal; NAC's borrowing; Climate change; Food security; Loans; Migration; Global
Cover IMF Working Papers
Measurement and Use of Cash by Half the World’s Population
Mr. Tanai Khiaonarong
and
David Humphrey
The use of cash for payments is not well measured. We view the value of cash withdrawn from ATMs, or as a share of all payments, as a more accurate and timely measure of cash use compared to the standard measure of currency in circulation, or as a ratio to GDP. These two measures are compared for 14 advanced and emerging market economies. When aggregated, the trend in cash use for payments is currently falling for half the world’s population. Such a measure can help inform policy decisions regarding CBDC and regulatory decisions concerning access to and use of cash.
Keywords:
Cash; payments; access to cash; central bank digital currency; cash use; ATM cash; aggregate Currency value; value of cash; use of cash; Currencies; Monetary base; Purchasing power parity; Stocks; Payment systems
Cover IMF Working Papers
The Sovereign-Bank Nexus in Emerging Markets in the Wake of the COVID-19 Pandemic
Andrea Deghi
,
Mr. Salih Fendoglu
,
Tara Iyer
,
Mr. Hamid R Tabarraei
,
Yizhi Xu
, and
Mustafa Yenice
The COVID-19 pandemic has brought the relationship between sovereigns and banks—the so-called sovereign-bank nexus—in emerging market economies to the fore as bank holdings of domestic sovereign debt have surged. This paper examines the empirical relevance of this nexus to assess how it could amplify macro-financial stability risks. The findings show that an increase in sovereign credit risk can adversely affect banks’ balance sheets and credit supply, especially in countries with less-well-capitalized banking systems. Sovereign distress can also impact banks indirectly through the nonfinancial corporate sector by constraining their funding and reducing their capital expenditure. Notably, the effects on banks and corporates are strongly nonlinear in the size of the sovereign distress.
Keywords:
Sovereign-bank nexus; emerging markets; financial stability; sovereign risk; COVID-19; banking sector; corporate investment; outcome variable; Annex I. data description; summary statistics; Emerging and frontier financial markets; Capital adequacy requirements; Commercial banks; Credit default swap; Global