IMF Staff Country Reports

Bhutan : Technical Assistance Report-Royal Monetary Authority-Steps Towards a Liquidity Forecasting and Management Framework

Author/Editor:

International Monetary Fund. Monetary and Capital Markets Department

Publication Date:

April 30, 2019

Electronic Access:

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Summary:

Setting up a liquidity forecasting framework would go a long way in establishing a key building block allowing the RMA to fulfil its legal mandate to formulate and implement monetary policy in ways better aligned with current central bank practices. By allowing the RMA to broaden its monetary instruments toolkit, a liquidity forecasting framework would: (i) facilitate monetary policy signaling, (ii) support the develop of a nascent money market, most notably the Government securities market, and (iii) allow banks to enhance their treasury function, leading to reduced liquidity costs and settlement risks.

Series:

Country Report No. 19/114

Subject:

Bank credit Central bank independence Central bank operations Central bank role Central Banks