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Monetary Exchange Rate and Capital Account Policies

These courses, presented by the IMF Institute, share concepts, tools, models and good practices underlying monetary, exchange rate and capital-account policies to promote macroeconomic and financial stability.


This course, presented by the Institute for Capacity Development, gives a comprehensive overview of exchange rate analysis and policy. Topics covered include:

  • Key exchange rate concepts (real, nominal, bilateral, multilateral, spot, forward).
  • Arbitrage and exchange rate conditions (uncovered interest rate parity, law of one price, purchasing power parity (PPP), relative PPP).
  • Real exchange rate equilibrium; role of the (real) exchange rate in achieving internal and external balance; adjustment to overall equilibrium under floating and fixed exchange rate regimes.
  • Link between the real exchange rate and growth; exchange rate growth strategies (undervaluation, Washington Consensus); the Balassa-Samuelson effect. 
  • Exchange rate regimes (taxonomy, choice of regime; benefits and costs of floating; the policy mix: impossible trinity; exchange rate regimes in historical context).
  • Exchange rate policy and the policy mix (monetary policy independence; overvaluation; external adjustment; exchange rate volatility and financial stability; exchange rate regime and trade integration; nominal anchor; fiscal policy; capital controls).
  • Practical Problems of Exchange Rate Policy in Developing and Emerging Market Economies (e.g., concerns of excessive exchange rate volatility; de jure vs. de facto regimes; competitiveness, price stability; exchange-rate pass-through; dollarization and currency mismatches; political economy of exchange rates; implementation of exchange rate policies; targets and instruments). Presentation of country cases.
  • Transitions from rigid to flexible exchange rates regimes (motives; speed of transition; supporting elements: deep and liquid domestic FX markets, setting and regulation of derivatives markets, coherent intervention policy, choice of nominal anchor; transition sequence). 
  • FX interventions (sterilized and non-sterilized FX interventions; impact on monetary policy; motives for intervention; instruments used for intervention; channels and effectiveness of FX interventions; tactics of FX interventions; foreign exchange intervention communication policy, rules vs. discretion).
  • Currency crisis (causes, role of macroeconomic and prudential policies).
  • International reserve adequacy (ARA) metric.
  • External Balance Assessment (EBA).
  • Early warning system.


This course, presented by the Institute for Capacity Development, is devoted to fostering understanding of the dynamics of capital flows and their effects on economic growth, macroeconomic volatility, and risk of crisis. The course starts with a refresher on balance of payments statistics and a description of alternative measures of capital flows and financial (capital) account openness. The second part of the course introduces the determinants of capital flows and the link between these flows and economic growth, macroeconomic volatility, and crisis risk. The course continues with a discussion of sequencing capital account liberalization to reap the benefits of capital market integration while minimizing and mitigating its adverse effects. This is followed by coverage of analytical methods and data sources for the analysis and forecasting of capital flows.  The course concludes with a discussion the IMF’s Institutional View on capital flows and how it relates to macroeconomic policy, financial regulation, and exchange rate intervention. The course includes case studies of actual crises, so that participants learn how policy setting and failure to recognize and address the buildup of vulnerabilities led to crisis. Throughout the course, participants are expected to engage in discussions and work on practical workshop exercises to solidify their understanding of the lecture material.


This online course, presented by the Institute for Capacity Development, introduces participants to a semi-structural macroeconomic model often used as a core of FPAS (Forecasting and Policy Analysis Systems) at the central banks. It also shows how to implement the key equations of a canonical quarterly projection model (QPM) in a macroeconomic modeling software. This course uses detailed country data highlighting an inflation targeting central bank, for hands-on historical filtration, forecasting, and calibration exercises.

The course covers two main technical aspects: 

  • introduction to a canonical New Keynesian model structure and its key properties; and 
  • implementation of the QPM in Matlab/Octave and the application of IRIS toolbox for solving and maintaining the QPM, as well as forecasting with the QPM.


This course, presented by the Institute for Capacity Development, gives a comprehensive overview of monetary policy regimes, monetary transmission mechanisms, and the role of monetary policy in macroeconomic stabilization. The course bridges the gap between theory, empirical evidence, and operational experience by illustrating the optimization problems and tradeoffs involved in monetary policy decisions. The learning process moves from lectures introducing the basic concepts to hands-on workshops. Case studies are used to reinforce participant understanding and to help them compare and assess a variety of experiences. The course recognizes the evolving nature of monetary frameworks and central bank mandates with attention to environmental, social and governance principles and recent crises that have dramatically changed the landscape in which central banks operate (beyond simple interest rate policies, with due consideration to Unconventional Monetary Policy). Recent evolution of FinTech and digital currencies and implications to monetary policy are also discussed.


This course, presented by the Institute for Capacity Development, provides rigorous training on the use of simple Dynamic New Keynesian (DNK) models to conduct monetary policy analysis and forecasting. It emphasizes analysis of monetary policy responses to macroeconomic imbalances and shocks. Participants are provided with the tools necessary to develop or extend the canonical model to fit their own monetary policy framework and selected features of their country’s economy. In the in-person course, country case studies are used to reinforce participant understanding and to help them compare and assess a variety of possible experiences.

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