2020 Article IV Consultation-Press Release; and Staff Report


2020 Article IV Consultation-Press Release; and Staff Report

Fund Relations

(As of January 22, 2020) Membership Status: Joined March 14, 1946; Article VIII

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Outstanding Purchases and Loans:

Latest Financial Arrangements:

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Projected Payments to Fund

(SDR Million; based on existing use of resources and present holdings of SDRs):

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Implementation of HIPC Initiative: Not applicable

Implementation of Multilateral Debt Relief Initiative (MDRI): Not applicable

Implementation of Post-Catastrophe Debt Relief (PCDR): Not applicable

Safeguards Assessment

Under the Fund’s safeguards assessment policy, the National Bank of Panama (NBP) was subject to the transitional procedures with respect to the Stand-By Arrangement, which was approved on June 30, 2000, and expired on March 29, 2002. The transitional procedures required a review of the NBP’s external audit mechanism only. The assessment was completed on July 12, 2001 and concluded that NBP’s external audit mechanism was at the time adequate.

Non-Financial Relations

Exchange Rate Arrangement

Panama uses the U.S. dollar as the primary means of payment in the local economy. Its national currency (balboa) is issued in the form of coins only and serves as a unit of account. The exchange rate of the balboa is fixed at 1 balboa per U.S. dollar. Panama has accepted the obligations of Article VIII, Sections 2(a), 3, and 4, and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions.

Last Article IV Consultation

The 2018 Article IV consultation was concluded on October 3, 2018. Panama is on the standard 12-month consultation cycle.

Financial Sector Assessment Program (FSAP)

A first-time FSAP was concluded in September 2011. It confirmed the banking sector’s strength and resilience to potential shocks, noting nonetheless that data gaps prevent a full analysis of macro-financial linkages. It concluded that the regulatory framework for banks was broadly adequate, but the regulation of nonbanks had important shortcomings. It recommended to build the capacity to monitor systemic risks and introduce a financial safety net, including a facility aimed at addressing temporary liquidity shortfalls and a limited deposit insurance fund.

Technical Assistance

Panama is a large recipient of technical assistance (TA) directly through the Fund or CAPTAC-DR. Latest assistance covered a broad range of topics. Assistance in the fiscal area included options to strengthen the fiscal framework, tax and customs administration, and fiscal risks. Support was provided with the national accounts, real sector statistics, producer price and export and import prices, and government finance statistics. Assistance was also provided in improving external sector statistics to facilitate the transition to BPM6 and strengthening AML/CFT risk-based supervision of the securities market intermediaries, designated non-financial businesses and professions (DNFBPs), as well as enhancing the capacity of the Panamanian financial intelligence unit to conduct operational and strategic analysis. In the financial area, TA concentrated on improving the bank resolution framework and macroprudential policy, the latter as part of a regional TA program. TA has also been provided to improve risk-based supervision, particularly of the banking sector, namely country and transfer risk supervision and to develop a market risk assessment tool. More recently, an STA mission conducted an in-depth evaluation of the institutional foundations of the statistical system, including its legal underpinnings. It aimed at improving Panama’s position of their statistical system as one of the leaders in Latin America.

Resident Representative


Relations with Other Financial Institutions

(As of January 22, 2020)

World Bank: http://www.worldbank.org/en/country/panama

Interamerican Development Bank: https://www.iadb.org/en/countries/panama/overview

Development Bank of Latin America (CAF): https://www.caf.com/en/countries/panama/

Central American Bank for Economic Integration: http://www.bcie.org/en/member-countries/regional-non-founding-members/panama/

Main Websites of Data

National Institute of Statistics and Census (http://www.inec.gob.pa/)

National accounts

Consumer price index

Monthly indicator of economic activity (IMAE)

Balance of payments

International reserves

Exchange rates

Labor and employment

Household income and expenditure survey

Poverty and inequality

Ministry of Economy and Finance (https://www.mef.gob.pa/)

Fiscal accounts

Central government budget

Superintendency of Banks (https://www.superbancos.gob.pa/en)

Balance sheets and income statements

Financial soundness indicators

Interest rates

Monetary and financial indicators

Panama Canal Authority (https://www.pancanal.com/) Balance sheets and income statements of Panama Canal Performance indicators for Panama Canal

Statistical Issues

(As of January 22, 2020)

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Table 1.

Panama: Common Indicators Required for Surveillance

(as of January 21, 2020)

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Source: IMF Staff

Both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

includes external gross financial asset and liability positions vis-à-vis nonresidents, including of offshore bank.

Daily (D); Weekly (W); Monthly (M); Quarterly (Q); Annually (A); Irregular (I); Not Available (NA).