The Chair’s Summing Up Independent Evaluation Office - IMF advice on Capital Flows Executive Board Meeting 20/93 September 18, 2020

Policy Papers, September 30, 2020

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Executive Directors welcomed the report of the Independent Evaluation Office (IEO) on IMF Advice on Capital Flows.
Directors appreciated the high quality of the report, and its thematic and background country studies.
Directors welcomed the finding that the adoption of the Institutional View (IV), along with the development of other frameworks and additional tools, had represented a major advance in the Fund’s policy framework to provide systematic advice to member countries on the management of capital flows and capital account liberalization.
Directors noted the conclusion that, in its application, the Fund had generally followed the IV and other policy frameworks to ensure that the advice was consistent, tailored to country circumstances, and evenhanded across countries.

Capital flow management measures (CFMs) have generally not been used to substitute for warranted policy adjustments.
Most authorities broadly support the IV’s sequenced framework to capital account liberalization.
The Fund’s specific advice has been appreciated in many cases, especially in the context of technical assistance.

Faced with abrupt capital flow reversals during the COVID-19 crisis, Directors noted that emerging markets and developing economies generally:
- followed a multi-pronged approach broadly consistent with the IV framework, and
- made relatively little use of CFMs.