Connect with IMF Institute

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.

    Back to top

    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.

    Back to top

    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.
    Back to top

    Syllabus: {9499CFFE-459C-4258-BB24-F1A572819BB1}

    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.
    Back to top

    Upcoming Offering

    Start date End date Location Session No. Primary & (Interpretation) language Apply
    August 2, 2021 August 13, 2021 Vienna, Austria JV 21.30V English (Russian) Deadline passed
    October 18, 2021 October 28, 2021 Abu Dhabi, United Arab Emirates CE 21.11V English Apply online by September 16, 2021
    November 8, 2021 November 19, 2021 Singapore, Singapore ST 21.13V English Apply online by August 30, 2021
    March 14, 2022 March 25, 2022 Ebene, Mauritius AT 22.04V English (French, Portuguese) Apply online by February 25, 2022
    Back to top

    Apply Now - Application deadline approaching:

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

    Virtual : Fiscal Frameworks (FF)

    English, August 2-13, 2021, New Delhi, India

    Apply online by July 23, 2021

    Virtual : Monetary Policy (MP)

    English (French, Portuguese), August 30, 2021 - September 10, 2021, Ebene, Mauritius

    Apply online by July 23, 2021

    Virtual : External Debt Statistics

    French (English, Portuguese), July 19-23, 2021, Ebene, Mauritius

    Apply online by July 23, 2021

    Foundations of Central Bank Law (FCBLx)

    English, May 1, 2021 - August 31, 2021, Course conducted online

    Apply online by July 24, 2021

    Virtual : Monetary Policy (MP)

    English, September 20, 2021 - October 1, 2021, Singapore, Singapore

    Apply online by July 26, 2021