Policy Papers

April 24, 2023

Resilience And Sustainability Trust―2023 Contribution Agreements with Estonia, France, Japan, Korea, Lithuania, and The Netherlands

Description: This paper presents six Resilience and Sustainability (RST) contribution agreements finalized with contributors between December 2022 and March 2023 including an existing agreement that was amended and restated. The concluded agreements provide for contributions in a total amount of about SDR 9.5 billion across the three RST accounts – the loan account, deposit account, and reserve account. The new agreements with six members add critical resources that support the continued smooth operations of the RST.

April 21, 2023

2023 Handbook of IMF Facilities for Low-Income Countries

Description: This Handbook provides guidance to staff on the IMF’s concessional financial facilities and non-financial instruments for low-income countries (LICs), defined here as all countries eligible to obtain concessional financing from the Fund. It updates the previous version of the Handbook that was published in December 2017 (IMF, 2017e) by incorporating modifications resulting from the 2018–19 Review of Facilities for Low-Income Countries and Review of the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries (IMF, 2019a, b), approved by the Board in May 2019; the reforms introduced in 2021 on the basis of the Board paper Fund Concessional Financial Support for Low-Income Countries—Responding to the Pandemic (IMF, 2021a), approved in July 2021; and a number of other recent Board papers. Designed as a comprehensive reference tool for program work on LICs, the Handbook also refers, in summary form, to a range of relevant policies that apply more generally to IMF members. As with all guidance notes, the relevant IMF Executive Board decisions including the terms of the various LIC Trust Instruments that have been adopted by the Board, remain the primary legal authority on the matters covered in the Handbook.

April 13, 2023

Progress Report to The IMFC on The Activities of The Independent Evaluation Office of The IMF: April 7, 2023

Description: Since the 2022 Annual Meetings, good progress has been made in advancing evaluation work at the IMF. The IEO has completed one evaluation and commenced two new evaluations selected from a menu of possible topics previously discussed with the Executive Board. A book drawing from the IEO 20th Anniversary Conference was published in early April. The current IEO Director, Charles Collyns, completes his term in April and will be succeeded by Pablo Moreno in May.

April 13, 2023

The Managing Director's Global Policy Agenda, Spring Meetings 2023: Safeguard Economic Stability, Support Vulnerable Countries, Sustain Our Future Prosperity

Description: The global economy is at another highly uncertain moment: tentative signs of stabilization earlier this year have receded, and the outlook is increasingly risky and uncertain. At the same time, divisions within and across countries are deepening, exacerbated by rising fragmentation. Strong policy action is needed together with pragmatic approaches to find areas of common ground to respond to shared challenges. The IMF is proactively engaging with our members to chart a clear course to a stronger and more sustainable path for the global economy.

April 12, 2023

Development Committee: The Managing Director's Written Statement April 2023

Description: Tentative signs of stabilization of the global economy have receded with recent financial sector turmoil. Headline inflation is moderating on the back of retreating commodity prices, but sticky underlying price pressures are complicating disinflation efforts. While growth in low-income developing countries (LIDCs) has been higher than in the rest of the world, its level is insufficient to address momentous challenges that range from combatting poverty to coping with climate change. Moreover, elevated debt levels and higher borrowing costs due to tighter global financial conditions leave policymakers with little fiscal space. Containing inflation, safeguarding financial stability, and protecting the vulnerable remain immediate policy priorities. At the same time, countries need to preserve or—in some cases—restore debt sustainability, which often requires better targeting of fiscally costly support measures taken in response to the COVID and commodity price shocks. Multilateral cooperation is more important than ever as many challenges are global, but it is acutely under threat from fragmentation.

April 11, 2023

Review of Implementation of The 2018 Framework for Enhanced Fund Engagement on Governance

Description: This paper reviews the implementation of the “2018 Framework for Enhanced Fund Engagement on Governance” (the “2018 Governance Framework”). The Board adopted the 2018 Governance Framework to promote a more systematic, effective, candid, and evenhanded engagement with member countries regarding corruption of macro critical dimensions and governance vulnerabilities that allow corruption. Building upon various sources of information, including surveys with key stakeholders, the paper provides a comprehensive stocktaking of the Fund’s work in governance and corruption since 2018, and makes specific proposals to further improve implementation of the Framework.

April 11, 2023

IMF Approach to Central Bank Digital Currency Capacity Development

Description: The global central banking community is actively exploring Central Bank Digital Currencies (CBDCs), which may have a fundamental impact on both domestic and international economic and financial stability. Over 40 countries have approached the IMF to request assistance through CBDC capacity development (CD). Current IMF CBDC CD efforts have focused on facilitating peer learning and developing analytical underpinnings for staff advice to member countries. CD missions have aimed at helping country authorities answer questions about how to think about CBDCs. With more available country experiments and empirical evidence, IMF CD will evolve to provide increased value-added advice more tailored to country circumstances and more solidly anchored in empirical and analytical work, and strengthen synergies with surveillance. This paper sketches a multi-year strategy to address frequently asked questions related to CBDC and outlines the process for developing a CBDC Handbook which will document emerging lessons, analytical findings, and policy views. The paper (1) explains the IMF’s approach to CBDC CD; (2) summarizes member countries’ emerging questions and challenges regarding CBDC; and (3) introduces the CBDC Handbook by motivating its scope and elucidating its governance structure.

April 3, 2023

Review of the Role of Trade in the Work of the Fund

Description: This paper outlines key changes in the global trade landscape in recent years, reviews the role of the Fund in this area, and outlines a trade strategy for the Fund going forward. The analysis points to three key messages. First, while trade has been resilient vis-à-vis recent global shocks, the deteriorating trade policy environment poses risks to the current levels of prosperity. Second, the Fund has responded quickly to key trade developments in its multilateral surveillance, but attention to trade policy has declined pointing to the need of improved expertise. Third, a reinvigorated trade strategy for the Fund would help country authorities to address key challenges, including adjusting to structural changes associated with climate change and new technologies; promoting policy coherence between trade and non-trade objectives such as climate, inequality, and security; and managing rising geopolitical tensions and risks of geo-economic fragmentation.

Notes:

Online Appendix I. Management Engagements and IMF Research on Trade

Press Release: IMF Executive Board Concludes the Review of the Role of Trade in the Work of the Fund

March 31, 2023

Review of the Fund’s Policy on Multiple Currency Practices—Extension of the Effective Date

Description: In July 2022, the Executive Board concluded the review of the Fund’s policy on multiple currency practices. It was planned that the revised policy would come into effect on April 1, 2023. The Board supported staff’s proposal to extend the transitional period and to delay the effectiveness date to November 1, 2023, to allow more time to country authorities to make the necessary changes to adjust to the new policy, especially given the challenging external environment. The longer transition will also leave more time to finalize the guidance note and to conduct an outreach with stakeholders. Elements of the revised policy which became effective immediately on July 1, 2022 will continue to apply as envisaged during the transitional period.

March 24, 2023

Implementation Plan in Response to the Board-Endorsed Recommendations from the IEO Evaluation Report on IMF Engagement with Small Developing States

Description: This paper presents a Management Implementation Plan (MIP) with actions to take forward the Board-endorsed recommendations from the Independent Evaluation Office (IEO)’s report on IMF Engagement with Small Developing States (SDS). The actions in the MIP are broad in scope, touching on all modalities of the Fund’s engagement with SDS, and seek to be comprehensive, self-reinforcing, cost-effective, and designed to be adopted as a package. The MIP aims to support a targeted and effective recalibration of engagement with SDS; enhance IMF’s surveillance and capacity development in SDS members; strengthen the Fund’s lending engagement with SDS, in line with the applicable policy frameworks; and secure an effective, well-tailored and more continuous staff presence in SDS.