IMF Management and Staff Respond to the Report by the Independent Evaluation Office on Fund Exchange Rate Policy Advice, 1999-2005

Press Release No. 07/101
May 17, 2007

IMF management and staff welcomed the report released today by the Independent Evaluation Office (IEO) on IMF Exchange Rate Policy Advice.

Commenting on the report, IMF Managing Director Rodrigo de Rato said, "I would like to thank the IEO for their report. The IMF Executive Board had a constructive, comprehensive and fruitful discussion of this report. Indeed, nowhere is it more important to review past experience than in exchange rate policy advice, which is at the core of the Fund's mandate.

"In fact, the Fund has undertaken several significant initiatives since the period covered by the IEO report in order to enhance effectiveness in this area. Several of these efforts were described in the Medium-Term Strategy. These include strengthening our surveillance of exchange rates in emerging markets, better integrating the financial sector into our analysis, and tackling issues of global importance in a targeted fashion through the Multilateral Consultation. Finally, we are currently clarifying the foundation of surveillance through a review of the `1977 Surveillance Decision', which guides all our work in this area," Mr. de Rato added.

Responding to the report, IMF staff said, "The report provides a wealth of information that is helpful to appraise the Fund's performance in the critical area of exchange rate policy advice. However, because the report does not address the specific initiatives in this area that have been launched since 2005, its applicability is somewhat diminished. Moreover, the report's conclusions are not fully supported by the evidence."

The Managing Director added that "Exchange rate surveillance has been identified as a priority in the implementation of the Fund's Medium-Term Strategy, and a host of initiatives are under way to enhance the effectiveness of the Fund's work in this area. As the IMF Board highlighted in its recent discussion, there is a shared responsibility for the Board, management, staff, as well as national authorities, to carry forward these initiatives and to build on them."



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