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Exchange Rate Policy (ERP)

Monetary, Exchange Rate, and Capital Account Policies

This course, presented by the Institute for Capacity Development, gives a comprehensive overview of exchange rate analysis and policy. The first part of the course:

  • introduces key definitions and concepts used in exchange rate analysis, such as real exchange rate misalignment;
  • discusses how changes in the real exchange rate may affect external adjustment and growth;
  • presents methodologies to estimate the equilibrium real exchange rate and explains the IMF external balance assessment (EBA) approach to measure the degree of real exchange rate misalignment; and
  • covers several aspects related to foreign exchange (FX) intervention: objectives, modalities, effectiveness, ways to assess the adequacy of foreign exchange reserves, and their management.

The second part of the course covers the macroeconomic policy tradeoffs related to different exchange rate regimes, the choice of exchange rate regime, and the main exchange rate policy challenges in developing and emerging market economies, such as the use of hybrid regimes, forced and unforced exits from pegs, and the reasons behind “fear-of-floating.”

The course concludes with a discussion of currency crises, macroeconomic policies to prevent them, and the analytical tools used to anticipate them.

Read More Topic : Monetary Exchange Rate and Capital Account Policies

    Target Audience

    Junior to mid-level officials who work with exchange rate policy and analysis.

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    Qualifications

    Participants are expected to have an advanced degree in economics or equivalent professional experience and be comfortable with Microsoft Excel and Excel-based applications. Before taking this course, it is recommended that applicants take either the Financial Programming and Policies (FPP) or the Macroeconomic Diagnostics (MDS) course. Participants are expected to also have a working knowledge of Word, Excel, PowerPoint, and EViews.

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    Course Objectives

    Upon completion of this course, participants should be able to:

    • Assess whether FX reserves are adequate using standard and new indicators of reserve adequacy.
    • Assess the effectiveness of interventions in the FX market, using case studies of interventions.
    • Measure the degree of real exchange rate misalignment using different models and methods, including the EBA.
    • Construct systems for early warning of currency crises using data on nominal exchange rates and international reserves.
    • Estimate the probability of experiencing a currency crisis using panel data econometric techniques.
    • Customize models and techniques taught in this course (including EBA, reserve adequacy metrics, early warning systems) to home country data and use those that are relevant to their work for policy analysis.

    Participants should also be able to:

    • Describe the exchange rate regime choice and how country-specific features could influence the choice.
    • Identify policy inconsistencies that may lead to currency crises.
    • Identify policy measures to prevent them.
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    Syllabus

    This course presents a comprehensive overview of exchange rate analysis and policy. The first part of the course introduces key definitions and concepts used in exchange rate analysis, including that of real exchange rate misalignment. It then discusses how changes in the real exchange rate may affect external adjustment and growth. The second part focuses on macroeconomic volatility and capital flows. It analyzes the role of foreign exchange intervention and international reserve adequacy. The third part covers the macroeconomic policy tradeoffs under different exchange rate regimes and the main exchange rate policy challenges in developing and emerging market economies, such as the use of hybrid regimes, forced and unforced exits from pegs, and the reasons behind the so-called Fear-of-Floating. The fourth part looks into real exchange rate equilibrium and misalignment. It elaborates on and uses the External Balance Assessment (EBA) methodology to that end. Finally, before participants’ presentations, the course moves to currency crises. It presents the Early Warning System to monitor such events.
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    Upcoming Offering

    Start date End date Location Session No. Primary & (Interpretation) language Apply
    March 8, 2021 March 19, 2021 Ebene, Mauritius AT 21.52V English (French) Invitation
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    Apply Now - Application deadline approaching:

    IMF offers online training to government officials and public. Click Learn more to find our current offerings.

    Virtual - Financial Sector Surveillance (FSS)

    English, November 2-6, 2020, Vienna, Austria

    Apply online by September 20, 2020

    Virtual - Financial Development and Financial Inclusion (FDFI)

    English, November 16-27, 2020, Singapore, Singapore

    Apply online by September 21, 2020

    Virtual - Economic Issues in Regional Integration (ERI)

    English (French), October 12-23, 2020, Ebene, Mauritius

    Apply online by September 23, 2020

    Virtual - Fiscal Frameworks (FF)

    English (French), October 26, 2020 - November 6, 2020, Ebene, Mauritius

    Apply online by September 23, 2020

    Virtual - Financial Sector Policies (FSP)

    English (French), November 9-20, 2020, Ebene, Mauritius

    Apply online by September 25, 2020