Guidance Note on the Assessment of Reserve Adequacy and Related Considerations
Policy Papers, June 3, 2016
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Bibliographic details
- Published: June 3, 2016
- Series: Policy Papers
Purpose and scope
- Provides operational guidance to IMF staff on reserve adequacy discussions in the IMF’s bilateral and multilateral surveillance.
- Based on views in the policy paper "Assessing Reserve Adequacy—Specific Proposals" and the related Board discussion.
- Publication date: June 3, 2016.
Key questions addressed
- What is the expected coverage of reserve issues at different stages of the bilateral surveillance process (Policy Note, mission, and Staff Report)?
- Which reserve adequacy tools best fit different economies based on their financial maturity, economic flexibility, and market access?
- What do possible reserve needs in mature markets relate to, and how can their adequacy be assessed?
- How can reserve adequacy discussions for emerging and deepening financial markets be tailored and applied to better evaluate reserve levels in:
- (i) commodity-intensive economies;
- (ii) countries with capital flow management measures (CFMs);
- (iii) partially and fully dollarized economies?
- What reserve adequacy considerations hold for countries with limited access to capital markets? How can metrics for these economies be tailored to evaluate their reserve needs?
- How should potential drains on reserves be covered?
- What are the various measures of the cost of reserves for countries with and without market access?
Intended user actions and operational focus
- Guide staff on when and how to discuss reserve issues during Policy Notes, missions, and in Staff Reports.
- Recommend tailoring reserve adequacy tools to country characteristics: financial maturity, economic flexibility, and market access.
- Advise on adapting reserve metrics for special country circumstances (commodity dependence, CFMs, dollarization, limited market access).
- Clarify considerations for covering potential reserve drains and for measuring the cost of holding reserves in differing market-access environments.
Subject classifications (as listed)
- Bilateral surveillance
- Capital outflows
- Classification of countries
- Dollarization
- Multilateral surveillance
- Reserve assets
- Reserves
- Reserves adequacy
Guidance Note on the Assessment of Reserve Adequacy and Related Considerations, June 3, 2016.
Content in this bundle
- _060316 - Executive Summary