Joint IMF-RFAs Press Release on the 8th High-Level Regional Financing Arrangements Dialogue Country

IMF News, October 10, 2023

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Joint IMF-RFAs Press Release on the 8th High-Level Regional Financing Arrangements Dialogue Country

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Bibliographic details

• Published: October 10, 2023

Event and context

• The eighth High-level Regional Financing Arrangements (RFAs) Dialogue was held on 10 October 2023 in Marrakesh.
• The dialogue took place "amidst a precarious global economic recovery" and focused on how crisis fighters can contribute to macroeconomic and financial stability in a more shock-prone world and the role of IMF-RFA collaboration.
• Following the devastating earthquake in Morocco on 8 September, participants expressed solidarity with the Moroccan authorities and people, extending "their deepest sympathies to all those affected."
• Press Release No. 23/344

Participants and representation

• The staff of the International Monetary Fund (IMF) and the heads of RFAs:
  • the Arab Monetary Fund,
  • the ASEAN+3 Macroeconomic Research Office cum the Chiang Mai Initiative Multilateralisation, represented by Bank Indonesia as its 2023 Co-chair,
  • the BRICS Contingent Reserve Arrangement, represented by the South African Reserve Bank,
  • the Eurasian Fund for Stabilization and Development,
  • the European Commission,
  • the European Stability Mechanism,
  • the Latin American Reserve Fund.
• Media contact listed: PRESS OFFICER: Camila Perez; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson

Key findings and assessments

• Global economy assessment:
  • The global economy has shown resilience to the string of recent shocks and crises, but the recovery is "slow, uneven, and fragile."
  • Participants stressed the need to "stay the course with policies that ensure a return to price stability and promote growth and financial stability."
• Emerging challenges for RFAs:
  • Countries face new challenges from "more frequent and extreme climate disasters," "the accelerated transition to a digital economy," and "demographic changes."
  • RFAs underlined the importance of readying their institutions for the changing economic and financial landscape.

Policy discussion and recommended actions for RFAs

• Strengthening institutional preparedness and tools:
  • Adjust lending toolkits to ensure relevance in prevention and resolution of future crises.
  • Upgrade economic monitoring capabilities to better account for new vulnerabilities and risks.
  • Expand the scope of capacity development initiatives to include emerging policy issues.
• Collaboration commitments:
  • RFAs agreed to continue sharing insights with each other and IMF staff as they strengthen tools, policies, and frameworks to ensure continued effectiveness within their respective mandates.

IMF presentations and reviews of instruments

• IMF staff presented:
  • Its assessment of the global economic outlook and policy priorities for preserving macroeconomic stability and bolstering sustainable and inclusive growth.
  • Updates on recently completed reviews of its precautionary and signaling instruments as part of adapting its toolkit and ensuring the resilience of the Global Financial Safety Net.
• Specific instrument reviews discussed:
  • Review of the Flexible Credit Line (FCL), Short-term Liquidity Line (SLL) and the Precautionary and Liquidity Line (PLL):
  • Based on the premise that "crisis prevention is far less costly that crisis resolution" and that "the value of precautionary instruments rises in a shock-prone environment."
  • The review focused on ensuring strong signaling through a clear qualification framework and on enhancing agility and capacity of precautionary instruments to help countries face different types of external risks.
  • Review of the Policy Coordination Instrument (PCI):
  • Introduced refinements to ensure its strong signaling function and help catalyze external financing from official and private creditors.
  • IMF staff acknowledged differences in legal frameworks across RFAs regarding signaling instruments such as the PCI and stressed continued close engagement with RFAs in line with the 2017 collaboration framework, which "remains well-suited to this end."

Multilateral priorities and follow-up

• Multilateral collaboration:
  • Noted as "more vital than ever" amid rising geoeconomic fragmentation.
  • Heads of RFAs welcomed a staff study on "the role of RFAs in the global efforts to mitigate global warming and deal with the consequences of climate change."
  • They thanked the French Co-chair of the G20 International Financial Architecture Working Group for an update on the group's latest work and priorities, especially "in the pursuit of a stronger Global Financial Safety Net."
• Future events:
  • The eighth joint RFA Research Seminar will be held in Luxembourg in the first half of 2024.
  • The ninth High-level RFA Dialogue will be convened at the time of the next IMF/ World Bank Annual Meetings in October 2024.

Source: Joint IMF-RFAs Press Release on the 8th High-Level Regional Financing Arrangements Dialogue Country (October 10, 2023).

References

• PRESS CENTER
• [Review of the Flexible Credit Line (FCL), Short-term Liquidity Line

(SLL) and the Precautionary and Liquidity Line (PLL)](https://www.imf.org/en/News/Articles/2023/10/06/pr23340-imf-executive-board-concludes-review-of-the-flexible-credit-line-and-liquidity-line)

• Review of the Policy Coordination Instrument (PCI)
• 2017 collaboration framework
• https://www.imf.org/en/home