Policy Papers
2014
November 12, 2014
Statement by the Managing Director on the Work Program of the Executive Board - Executive Board Meeting - November 24, 2014
Description: The Managing Director’s Global Policy Agenda (GPA) presented to the IMFC in October identified a range of actions needed to prevent growth from settling into a “new mediocre” with unacceptably low job creation and inclusion. These actions included managing eventual monetary normalization in advanced economies and its effects on other economies, growth-friendly fiscal policies to enhance the quality of public expenditure and reduce distortions in revenue collection, policies to safeguard financial stability while strengthening credit transmission, structural reforms to buttress productivity and strengthen growth, and increasing investment in infrastructure. The GPA also outlined how the Fund would support the membership through assessments and policy advice provided in the context of multilateral and bilateral surveillance, capacity building, and financial support.
November 7, 2014
Key Trends in Implementing the Fund's Transparency Policy
Description: At the time of the 2005 review of the Fund’s transparency policy, it was agreed that information on key trends in implementation of the transparency policy would be circulated to the Board regularly, along with lists indicating the publication status of reports discussed by the Board. The set of tables provided in this report updates the last Key Trends with information on documents issued to the Board through December 2013.
November 7, 2014
Staff Guidance Note on Macroprudential Policy - Detailed Guidance on Instruments
Description: This note covers considerations that can guide the staff’s policy advice on the use of a broad range of macroprudential tools. It discusses the transmission and likely effectiveness of these tools in mitigating systemic risks and the set of indicators that can be used in surveillance to assess the need for changes in macroprudential policy settings. This note is a supplement to the Staff Guidance Note on Macroprudential Policy.
November 7, 2014
Staff Guidance Note on Macroprudential Policy - Considerations for Low Income Countries
Description: This note explores how characteristics of financial systems commonly observed in low income countries may shape the approach to the staff’s advice on macroprudential policy. It explores the implications of the ongoing process of financial and institutional development for the conduct of macroprudential policy in these countries. This note is a supplement to the Staff Guidance Note on Macroprudential Policy.
November 6, 2014
Staff Guidance Note on Macroprudential Policy
Description: This note provides guidance to facilitate the staff’s advice on macroprudential policy in Fund surveillance. It elaborates on the principles set out in the “Key Aspects of Macroprudential Policy,” taking into account the work of international standard setters as well as the evolving country experience with macroprudential policy. The main note is accompanied by supplements offering Detailed Guidance on Instruments and Considerations for Low Income Countries.
October 21, 2014
Statement by the Managing Director on the Independent Evaluation Office Report on IMF Response to the Financial and Economic Crisis: An IEO Assessment
Description: The Independent Evaluation Office (IEO) has produced a detailed report that provides valuable insights on how the IMF responded to the global financial and economic crisis. The analysis in the report is broadly balanced, and Managing Director welcomes the IEO’s finding that the IMF played an important role in the global response to the crisis, and broadly supports the report’s recommendations.
October 16, 2014
Recent Fall in the SDR Interest Rate--Implications and Proposed Amendments to Rule T-1
Description:
The SDR interest rate is at historic lows. Under the current Rule T-1, the SDR interest rate is calculated as the weighted average of interest rate instruments in the SDR basket, and stood at just 3 basis points for the week of October 13th. Market rates could decline further, which could reduce the SDR interest rate to zero or negative levels under the formula of the current Rule T-1.
However, there is no authority under the Articles of Agreement for the Fund to establish a zero or negative SDR interest rate. The wording of the relevant provisions in the Articles does not leave room for a zero or negative rate, and nothing in the legislative history of the First and Second Amendments suggests that zero or negative rates were ever contemplated. Negative SDR interest rates would also have adverse implications for the Fund’s finances.
Moreover, very low SDR interest rates affect the functioning of the burden sharing mechanism for deferred charges. Under current Board decisions, the equal burden sharing, where creditors and debtors as a group generate equal amounts to cover deferred charges, requires a minimum positive SDR interest rate to operate. The SDR interest rate has now fallen below that minimum level.
This paper proposes technical amendments to Rule T-1 and the burden sharing mechanism to address these issues. In particular, the paper proposes setting a 5 basis point floor on the SDR interest rate, changing the rounding rules on the SDR interest rate and the burden sharing adjustment, and reducing the 1 basis point minimum of the burden sharing adjustment to 0.1 basis point. These measures would preserve a minimal capacity of equal burden sharing aimed at protecting the Fund’s balance sheet, while limiting potential departures of the SDR interest rate from market interest rates.
October 6, 2014
Arab Countries in Transition - Economic Outlook and Key Challenges
Description: In spite of deepening and spreading conflicts in the region, as well as, in many cases, a challenging internal socio-political environment, the Arab Countries in Transition (Egypt, Jordan, Libya, Morocco, Tunisia and Yemen) have broadly maintained macroeconomic stability. At the same time, however, their economies are not delivering the growth rates needed for a meaningful reduction in unemployment, in particular for the youth and women. Notwithstanding diversity of conditions, countries should quickly advance structural reforms to foster higher and more inclusive growth, and continue to strengthen fiscal and external buffers to maintain stability amid heightened uncertainty. Coordinated support from the international community will be crucial in the form of financing, improved trade access, and capacity building assistance.
October 3, 2014
Managing Director’s Global Policy Agenda to the International Monetary and Financial Committee
Description:
The latest snapshot of the global economy looks uneasily familiar: a brittle, uneven recovery, with slower-than-expected growth and increasing downside risks. Bold and resolutely executed policies are needed to prevent growth from settling into a “new mediocre,” with unacceptably low job creation and inclusion. Measures should emphasize: lifting growth, building resilience, and achieving coherence.
The IMF will help members deliver on this policy agenda by redeploying resources toward lending and capacity building for members facing pressing challenges; strengthening macro-financial surveillance; providing policy advice and analysis on managing the impending monetary normalization, including on deploying macro-prudential tools; and implementing growth-friendly fiscal policies and macro-critical structural reforms. Staff will also build on existing work and develop options for next steps should ratification of the 2010 reforms be delayed beyond year end.
The Executive Summary is also available in:
Arabic , Chinese, French, Japanese, Russian, and Spanish.
October 3, 2014
Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries
Description: New commitments under programs supported by the Poverty Reduction and Growth Trust (PRGT) amounted to SDR 0.6 billion during the first nine months of 2014, and disbursements on existing arrangements amounted to about SDR 0.3 billion through end-August. While this level of demand is low by historical standards, new commitments for 2014 as a whole could still exceed SDR 1 billion. These projections are, however, subject to considerable uncertainty regarding progress with ongoing program negotiations.