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Africa > Uganda

You are looking at 1 - 6 of 6 items for :

  • Type: Journal Issue x
  • International Financial Markets x
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Cover FinTech Notes
Tokenization and Financial Market Inefficiencies
Itai Agur
,
German Villegas Bauer
,
Tommaso Mancini-Griffoli
,
Maria Soledad Martinez Peria
, and
Brandon Tan
Most financial assets are digital today. Tomorrow, they may be tokenized. Tokenization implies recording and transferring assets on a widely shared and trusted digital ledger that can be programmed. Interest in tokenization is strong and experiments abound, but what are the consequences of this new trend for financial markets? This note introduces a taxonomy and a conceptual framework centered on market inefficiencies to evaluate this question. Some inefficiencies could decline across the asset life cycle. Others would remain, however, and new ones could emerge. Issuing, servicing, and redeeming assets might involve fewer intermediaries and thus become cheaper. The costs of trading assets may also decrease as tokenization lowers some counterparty risks and search frictions and offers flexibility in settlement. Additionally, greater competition among brokers could lower transaction fees. However, tokenization may amplify shocks if it induces institutions to become more interconnected and hold lower liquidity buffers or higher leverage, potentially jeopardizing financial stability. Programs themselves may introduce new risks related to strings of contingent contracts or faulty code. While competition may grow among financial intermediaries, the provision of market infrastructure could become more concentrated due to network effects.
Keywords:
Tokenization; central banks; asset lifecycle; financial markets; financial asset market friction; B. market infrastructure investment externality; financial market inefficiency; IMF Library; Note 2025/001; D. knowledge externality; Bonds; Smart contracts; Securities markets; Liquidity; Blockchain and DLT; Global
Cover IMF Working Papers
Exchange Rate Liberalization in Selected Sub-Saharan African Countries Successes, Failures, and Lessons
Mr. Nils O Maehle
,
Ms. Haimanot Teferra
, and
Mrs. Armine Khachatryan
Many sub-Saharan African (SSA) countries liberalized their economies in the 1980s and early 1990s. This paper reviews the foreign exchange regime reforms in selected SSA, and their associated macroeconomic policies and economic performance during and after these reforms were undertaken. Before liberalization, most of the reviewed countries were characterized by extensive foreign exchange rationing, sizeable black market premiums, and declining per capita real income. Today, the countries that successfully reformed look markedly different. Rationing and parallel market spreads are a distant memory, and per capita income has increased sharply.
Keywords:
WP; exchange rate; U.S. dollar; government; country; headline inflation; proceeds; Exchange rate regimes; reforms; growth; inflation; structural adjustment; managed float; per capita income; inflation rate; exchange rate liberalization; stabilization effort; exchange rate depreciation; U.S. dollar exchange rate; adjustable peg; auction market; overvalued exchange rate; Exchange rates; Exchange rate arrangements; Currency markets; Sub-Saharan Africa
Cover IMF Working Papers
Capital Market Integration: Progress Ahead of the East African Community Monetary Union
Mr. Masafumi Yabara
Capital markets in the East African Community (EAC) face common challenges of low capitalization and liquidity, but to different degrees. EAC member countries have made noticeable progress in developing domestic capital markets through a regional approach, removing constraints on capital transactions and harmonizing market infrastructure. Nevertheless, empirical analysis suggests capital market integration has not deepened during the past few years in the EAC, although convergence of investment returns is taking place to some extent. Learning from the experience of the West African Economic and Monetary Union and the Association of Southeast Asian Nations, EAC countries would benefit from four actions to accelerate financial market integration: (i) further harmonize market infrastructure; (ii) strengthen regional surveillance mechanisms; (iii) encourage local currency bond issuance by multilateral financial institutions; and (iv) build the capacity of the existing regional institutions.
Keywords:
WP; EAC treasury bill market; market infrastructure; EAC capital market integration; EAC treasury bond bond market; EAC debt markets; East African Community; regional integration; monetary union; capital market; equity; stock; debt; bond; beta convergence; sigma convergence; cointegration; EAC Treasury Bill; EAC capital markets; Stock markets; Securities markets; Capital markets; Capital market integration; Treasury bills and bonds; Sub-Saharan Africa; West Africa; Global
Cover IMF Working Papers
Assessing Bank Competition within the East African Community
Sarah Sanya
and
Matthew Gaertner
This paper is an empirical analysis of competitiveness in the banking system of four out of the five East African Community (EAC) countries2. The results show that the degree of competition is low due to a combination of structural and socio-economic factors. By way of preview, the analysis ranks the countries in terms of banking sector competitiveness in the following order: Kenya, Tanzania, Uganda and Rwanda.
Keywords:
WP; return on assets; concentration ratio; EAC country; bank competition; East African Community; Competition; Banking; Financial sector; H-statistic; Lerner Index; bank regulation; bank performance indicator; EAC banking systems; bank freedom; banks output; Commercial banks; Foreign banks; Credit; Africa
Cover IMF Working Papers
Measuring Financial Barriers Among East African Community Countries
Yi David Wang
This paper seeks to quantify existing financial barriers among East African Community (EAC) member countries based on analysis of each member country’s foreign exchange market. The primary contribution of this paper is the generation of an aggregate measure of financial barriers for the three relatively more advanced members (Kenya, Uganda, and Tanzania) using forward foreign exchange and interbank interest rate data. Its empirical results, which are corroborated by other evidence such as the levels of development of the financial markets and restrictions on capital flows, suggest that Kenya is the EAC’s most financially open country, followed by Uganda, and then Tanzania. The fact that the three countries exhibit different degrees of financial openness suggests that financial integration in the EAC region has a way to go.
Keywords:
WP; EAC country; foreign exchange market; exchange rate; dollar; Forward rates; foreign exchange; financial barrier; financial integration; EAC member; EAC currency; spot market; Kenya shilling; Currency markets; Interest rate parity; Currencies; Interbank rates; Global
Cover IMF Working Papers
Floating Exchange Rates in Africa
International Monetary Fund
The paper examines the experiences of nine African countries that have introduced floating exchange rate regimes in the 1980s. The various types of market arrangements are explored, focusing on the roles of market participants. After a review of exchange rate developments under the regimes, some related concerns with respect to urban income and employment, resource allocation, and short-term instability are analyzed. In the light of this analysis, the paper suggests some policy recommendations aimed at ensuring the success of the floating regimes.
Keywords:
WP; exchange rate; market; proceeds; market system; goods market; clearing rate; market intervention; market participant; market allocation; effective demand; types of exchange market arrangement; U.S. dollar; market clearing rate; Exchange rates; Floating exchange rates; Currency markets; Exchange rate arrangements; Africa