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Africa > Uganda

You are looking at 1 - 5 of 5 items for :

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Cover Policy Papers
Adequacy of the Global Financial Safety Net—Considerations for Fund Toolkit Reform
International Monetary Fund
liquidity in the face of increased vulnerabilities calls for enhancing the liquidity support provided through the global financial safety net (GFSN). The global economy is experiencing a period of protracted uncertainty, marked by frequent episodes of volatility. Demand for liquidity has intensified, in particular from emerging markets, which are experiencing a build-up of vulnerabilities and the depletion of their fiscal buffers. The enhanced GFSN meets only partially this higher demand for liquidity. The IMFC and G20 have called on the Fund to further strengthen the safety net. The uneven use of the Fund’s toolkit for crisis prevention suggests the need to reconsider its design. Despite a major overhaul of the Fund’s lending instruments available for precautionary financing, only a modest number of countries have used them. In particular, the lack of access to a liquidity backstop for members with strong policies—similar to the standing bilateral swap arrangements (BSAs) among central banks—limits the availability of Fund support over the whole duration of the shock during protracted periods of global uncertainty. Moreover, the need to resort to Fund financing still carries a high political cost (stigma) for some members. To enhance further the Fund’s toolkit for crisis prevention, consideration could be given to revisiting the existing toolkit and introducing new instruments. The toolkit could thus be enhanced by: establishing a new facility for precautionary financing that would provide a "standing" liquidity backstop to members with strong fundamentals and policies for use when hit by liquidity shocks; and adjusting the existing toolkit to maintain cohesion. Any change to the Fund toolkit would need to take into account the tradeoffs between reducing stigma and containing moral hazard, while simultaneously safeguarding Fund resources. A Fund policy monitoring instrument could improve the cohesion of the global safety net. As the GFSN has expanded and become more multi-layered, there is a need to improve cooperation across the different layers to unlock financing and signal commitment to reforms. Creating a policy monitoring instrument that is available to all Fund members could help in this regard. Next steps . In light of Directors’ views on these points, staff could come back with subsequent papers that lay out specific and detailed proposals for reforming the lending toolkit. While these papers focus on the GRA lending toolkit, a separate forthcoming paper will assess some aspects of the concessional lending toolkit.
Keywords:
PP; FCL; director; Short-term Liquidity Swap; resource; lending toolkit; review of the Flexible Credit Line; SLS qualification criteria; FCL qualification framework; crisis prevention; Ara metrics; fund resource; Liquidity; Balance of payments need; Lines of credit; Financial safety nets; Crisis prevention; Global
Cover IMF Working Papers
Monetary Policy in a Developing Country: Loan Applications and Real Effects
Charles Abuka
,
Ronnie K Alinda
,
Ms. Camelia Minoiu
,
José-Luis Peydró
, and
Mr. Andrea F Presbitero
The transmission of monetary policy to credit aggregates and the real economy can be impaired by weaknesses in the contracting environment, shallow financial markets, and a concentrated banking system. We empirically assess the bank lending channel in Uganda during 2010–2014 using a supervisory dataset of loan applications and granted loans. Our analysis focuses on a short period during which the policy rate rose by 1,000 basis points and then came down by 1,200 basis points. We find that an increase in interest rates reduces the supply of bank credit both on the extensive and intensive margins, and there is significant pass-through to retail lending rates. We document a strong bank balance sheet channel, as the lending behavior of banks with high capital and liquidity is different from that of banks with low capital and liquidity. Finally, we show the impact of monetary policy on real activity across districts depends on banking sector conditions. Overall, our results indicate significant real effects of the bank lending channel in developing countries.
Keywords:
WP; bank balance; Monetary policy transmission; Bank lending channel; Bank balance sheet channel; Developing countries; lending rate; demand shock; market power; bank capital; Loans; Bank credit; Credit; Financial statements; Liquidity; Sub-Saharan Africa; East Africa
Cover IMF Working Papers
Excess Liquidity and Effectiveness of Monetary Policy: Evidence from Sub-Saharan Africa
Mr. Magnus Saxegaard
This paper examines the pattern of excess liquidity in sub-Saharan Africa and its consequences for the effectiveness of monetary policy. The paper argues that understanding the consequences of excess liquidity requires quantifying the extent to which commercial bank holdings of excess liquidity exceed levels required for precautionary purposes. It proposes a methodology for measuring this quantity and uses it to estimate a nonlinear structural VAR model for the CEMAC region, Nigeria and Uganda. The study suggests that excess liquidity weakens the monetary policy transmission mechanism and thus the ability of monetary authorities to influence demand conditions in the economy.
Keywords:
WP; transmission mechanism; nominal exchange rate; contractionary monetary policy
Cover IMF Working Papers
Flight Capital as a Portfolio Choice
Anke Hoeffler
,
Ms. Catherine A Pattillo
, and
Mr. Paul Collier
This paper sets flight capital in the context of portfolio choice, focusing upon the proportion of private wealth that is held abroad. There are large regional differences in this proportion, ranging from 5 percent in South Asia to 40 percent in Africa. We explain cross-country differences in portfolio choice by variables that proxy differences in the risk-adjusted rate of return on capital. We apply the results to four policy questions: how the East Asian crisis affected domestic capital outflows; herd effects; the effect of the IMF-World Bank debt relief initiative for heavily-indebted poor countries (HIPC) on capital repatriation; and why so much of Africa’s private wealth is held outside the continent.
Keywords:
WP; institutional investor; risk rating; increases in capital capital flight; capital flight literature; rate of return; Capital flight; portfolio choice; capital flight share; cline capital flight measure; flight capital; Capital outflows; Stocks; Foreign assets; Real exchange rates; East Asia; Africa; Sub-Saharan Africa; South Asia; Middle East
Cover Summary Proceedings of the Eighteenth Annual Meetings of the Board of Governors, 1963
Summary Proceedings of the Eighteenth Annual Meetings of the Board of Governors, 1963
International Monetary Fund. Secretary's Department

Abstract

The speeches made by officials attending the IMF–World Bank Annual Meetings are published in this volume, along with the press communiqués issued by the International Monetary and Financial Committee and the Development Committee at the conclusion of the meetings.

Keywords:
AS; I-Shuan sun; articles of agreement; fund study ways and means; central bank Governors; development assistance committee; Currencies; International liquidity; International monetary system; Exports; Gold; Central America; Africa; Europe; Central Africa; Eastern Europe; fund stand-by arrangement