Policy Papers

Integrated Policy Framework—Principles for the Use of Foreign Exchange Intervention

Publication Date:

December 21, 2023

Electronic Access:

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Summary:

This note guides policy advice on the use of foreign exchange intervention (FXI) as part of the Integrated Policy Framework (IPF) in Fund surveillance. The note provides general principles for the advice in countries with flexible exchange rates and sets out three use cases for FXI that are tied to specific frictions. It explores the use of FXI as part of an overall policy response, allowing the advice to differ with shocks, frictions, and country-specific circumstances.

Series:

Policy Paper No. 2023/061

Subject:

Currency markets Exchange rate adjustments Exchange rates Financial markets Foreign exchange Inflation Monetary policy Political economy Prices

Frequency:

occasional