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Zixuan Huang
,
Amina Lahreche
,
Mika Saito
, and
Ursula Wiriadinata
E-money development has important yet theoretically ambiguous consequences for monetary policy transmission, because nonbank deposit-taking e-money issuers (EMIs) (e.g., mobile network operators) can either complement or substitute banks. Case studies of e-money regulations point to complementarity of EMIs with banks, implying that the development of e-money could deepen financial intermediation and strengthen monetary policy transmission. The issue is further explored with panel data, on both monthly (covering 21 countries) and annual (covering 47 countries) frequencies, over 2001 to 2019. We use a two-way fixed effect estimator to estimate the causal effects of e-money development on monetary policy transmission. We find that e-money development has accompanied stronger monetary policy transmission (measured by the responsiveness of interest rates to the policy rate), growth in bank deposits and credit, and efficiency gains in financial intermediation (measured by the lending-to-deposit rate spread). Evidence is more pronounced in countries where e-money development takes off in a context of limited financial inclusion. This paper highlights the potential benefits of e-money development in strengthening monetary policy transmission, especially in countries with limited financial inclusion.
Ms. Corinne C Delechat
,
Lama Kiyasseh
,
Ms. Margaux MacDonald
, and
Rui Xu
This study analyzes the drivers of the use of formal vs. informal financial services in emerging and developing countries using the 2017 Global FINDEX data. In particular, we investigate whether individuals’ choice of financial services correlates with macro-financial and macro-structural policies and conditions, in addition to individual and country characteristics. We start our analysis on middle and low-income countries, and then zoom in on sub-Saharan Africa, currently the region that most relies on informal financial services, and which has the largest uptake of mobile banking. We find robust evidence of an association between macroprudential policies and individuals’ choice of financial access after controlling for personal and country-level characteristics. In particular, macroprudential policies aimed at controlling credit supply seem to be associated with greater resort to informal financial services compared with formal, bank-based access. This highlights the importance for central bankers and financial sector regulators to consider the potential spillovers of monetary policy and financial stability measures on financial inclusion.
International Monetary Fund
Over the past two decades, many low- and lower-middle income countries (LLMICs) have improved control over fiscal policy, liberalized and deepened financial markets, and stabilized inflation at moderate levels. Monetary policy frameworks that have helped achieve these ends are being challenged by continued financial development and increased exposure to global capital markets. Many policymakers aspire to move beyond the basics of stability to implement monetary policy frameworks that better anchor inflation and promote macroeconomic stability and growth. Many of these LLMICs are thus considering and implementing improvements to their monetary policy frameworks. The recent successes of some LLMICs and the experiences of emerging and advanced economies, both early in their policy modernization process and following the global financial crisis, are valuable in identifying desirable features of such frameworks. This paper draws on those lessons to provide guidance on key elements of effective monetary policy frameworks for LLMICs.
International Monetary Fund. African Dept.

Abstract

Prepared by the Policy Wing of the IMF African Department, and published twice a year in English and French, Regional Economic Outlook: Sub-Saharan Africa analyzes economic performance and short-term prospects of the 44 countries covered by the Department. Topics examined in recent volumes include responses to exogenous shocks, growth performance and growth-enhancing policies, the effectiveness of regional trade arrangements, macroeconomic implications of scaled-up aid, financial sector development, and fiscal decentralization. Detailed country data, grouped by oil-exporting and -importing countries and by subregion, are provided in an appendix and a statistical appendix, and a list of relevant publications by the African Department is included.

International Monetary Fund. Research Dept.

Abstract

The World Economic Outlook, published twice a year in English, French, Spanish, and Arabic, presents IMF staff economists analyses of global economic developments during the near and medium term. Chapters give an overview of the world economy; consider issues affecting industrial countries, developing countries, and economies in transition to market; and address topics of pressing current interest. Annexes, boxes, charts, and an extensive statistical appendix augment the text.

International Monetary Fund. External Relations Dept.
This paper highlights that the fight against worldwide inflation was the main theme of the Finance Ministers and central bank Governors from 138 member countries that participated in the 1979 Annual Meeting of the IMF’s Board of Governors in Belgrade in October 1979. Unlike the agenda for the 1978 Meeting, which contained a number of single issues, such as quota increases and special drawing rights allocations, requiring specific decisions and action, the 1979 Meeting was devoted principally to a wide-ranging discussion of the world’s economic problems.