IMF Executive Board Discusses the Outcomes of Central Bank Transparency Code Pilot Reviews

March 15, 2023

Washington, DC : On February 15, 2023, the Executive Board of the International Monetary Fund (IMF) discussed a policy paper ‘The Central Bank Transparency Code- Findings of the Pilot Reviews’  that provides an overview of the Central Bank Transparency Code (CBT) pilot reviews. The CBT is a comprehensive set of transparency principles and practices that apply to all central banks, regardless of their mandates, governance frameworks, and institutional arrangements. Following the Board’s adoption of the Code in 2020, staff conducted seven pilot reviews on a diverse set of central banks, operating in different economic, financial, and institutional development environments, and reflecting different levels of income, exchange rate regime, and geographies.

The pilot reviews documented transparency practices across all key aspects of central banking and highlighted the areas for improvement. The CBT reviews’ recommendations received strong traction from the participating central banks. A survey of the participating central banks, conducted following each CBT review, confirmed that all CBT pilots were viewed as very beneficial, confirming staff’s view of the efficacy and success of the CBT. The pilot CBT reviews helped to facilitate work in other IMF workstreams, notably the Financial Sector Assessment Program (FSAP), Article IV consultations, and Technical Assistance.

The pilot reviews have shown that the CBT review can be an effective tool in support of central bank independence by enhancing their overall transparency and accountability. Based on the successful experience of pilot CBT reviews and continued interest from central banks, the staff will continue to conduct these reviews and establish a repository of transparency practices documented during the review process. The staff will report back to the Board in FY2026 on the progress of the CBT reviews and an update to the Code following five years of implementation.

Executive Board Assessment:

Executive Directors welcomed the update on the implementation of CBT reviews and appreciated the strong traction and positive feedback expressed by the participating central banks. They stressed that the CBT should retain its voluntary nature and continue to strike the right balance between transparency and confidentiality in a manner that is commensurate with country-specific circumstances, including legal and regulatory frameworks. This balance is vital in the sensitive policy areas such as foreign exchange management, financial integrity, and emergency liquidity assistance.

Directors emphasized the need to ensure proper prioritization of Fund membership while leveraging synergies with other Fund workstreams. They called for prioritizing middle-income countries’ and low-income countries’ central banks with significant room for improvement in transparency practices, but also were open to incorporating countries at an advanced stage of transparency practices to facilitate peer learning.

Directors broadly agreed that comprehensive CBT reviews across the five pillars should be carried out for better efficacy and optimal use of resources; nonetheless, they saw merit in conducting a modular approach to meet country-specific needs, especially where resources and capacity are constrained.

Directors supported staff’s proposal to continue to offer CBT reviews to the IMF membership as a voluntary tool to enhance central bank transparency and facilitate accountability. They suggested an annual interim update on CBT review findings to keep the Board apprised of evolving central bank transparency practices.

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