Policy Papers
2023
November 14, 2023
Central Bank Digital Currency—Initial Considerations
Description: The paper briefs the Executive Board on the initial considerations on CBDC. These cover a framework to guide countries’ CBDC exploration, as well as implications for monetary policy transmission, capital flow management measures, and financial inclusion.
November 6, 2023
Review Of the Fund's Policy on Multiple Currency Practices—Extension of The Effective Date
Description: In July 2022, the Executive Board concluded the review of the Fund’s policy on multiple currency practices (MCPs). The effectiveness date for the new policy was originally envisaged for April 1, 2023 and then delayed to November 1, 2023. Staff proposed and the Board supported an additional extension of the transitional period and a delay of the effectiveness date to February 1, 2024. The extension will allow more time for the authorities to adjust to the new policy and for staff to conduct outreach with stakeholders to raise awareness. Elements of the revised policy which became effective immediately on July 1, 2022 will continue to apply as envisaged during the transitional period.
November 6, 2023
Resilience and Sustainability Trust – 2023 Contribution Agreements with Italy, Luxembourg, Oman, and the United Kingdom
Description: This paper presents Resilience and Sustainability (RST) contribution agreements finalized with four contributors between April 2023 and September 15, 2023. The concluded agreements provide for contributions in a total amount of about SDR 4.7 billion across the three RST accounts – the loan account, deposit account, and reserve account. The new agreements with four members add critical resources that support the continued smooth operations of the RST.
November 3, 2023
FY2023—Output Cost Estimates and Budget Outturn
Description: The paper presents highlights from the FY 2023 budget, followed by a discussion of outputs based on the Fund Thematic Categories and of inputs.
October 30, 2023
Implementation Plan in Response to The Executive Board-Endorsed Recommendations From The IEO Evaluation on The IMF’s Pandemic Response
Description: The Management Implementation Plan (MIP) proposes actions in response to the Board-endorsed recommendations provided by the Independent Evaluation Office (IEO)’s report on the IMF’s early response to the COVID pandemic. The two IEO recommendations aim for the Fund to (i) Develop special policies and procedures that could be quickly activated to address particular needs and circumstances of global crises and (ii) Take steps to reinforce the Fund’s institutional preparedness to deal with global crises and other large shocks. The MIP highlights how existing workstreams will be used to address part of the recommendations, specifically: (i) Drawing the lessons from the use of precautionary lending instruments during the pandemic and using them in the ongoing review of these facilities; (ii) Drawing the lessons from the implementation of governance safeguards in the context of covid-related emergency financing and respond to the actions identified in the final stocktaking; and (iii) Reviewing financial implications of covid-related lending on Poverty Reduction and Growth Trust (PRGT) resources in the regular updates on PRGT financing and resources. The MIP also defines new actions that aim to enhance the Fund’s preparedness to face future crises and are slated to be implemented by the end of FY25. These consists in: (i) Developing a crisis playbook, which will further codify Management’s commitment to an early participatory consultation with the Board in the event of a global crisis and inform the engagement with the Board on the broad strategy and institutional priorities for responding to the crisis; (ii) Enhancing the process of staff reallocation during a crisis through expanding the staff Talent Inventory to include skills and experience relevant in crises and examining HRD’s coordinating role in staff reallocation, as well as reviewing how recruitment processes could be made more agile in a crisis; (iii) Developing a strategy for surge capacity of the Crisis Management Team; (iv) Reviewing the experience of pandemic-related lending to low-income countries to consider the adequacy of access norms and the possible need for enhancements of the low-income lending toolkit against the long-term financial sustainability of the PRGT; and (v) Exploring ways to further strengthen the coordination with partners, especially the World Bank.
October 12, 2023
Development Committee: The Managing Director's Written Statement October 2023
Description: The global economy has shown resilience, but the recovery is slow and uneven. Risks have moderated in recent months but remain tilted to the downside. Headline inflation is about half of its 2022 peak but the decline in core inflation is more gradual. Growth momentum across most low-income and emerging market countries is weakening and achieving the 2030 Sustainable Development Goals (SDGs) is becoming increasingly challenging. While restoring price stability, normalizing fiscal policy, and protecting the vulnerable remain near-term policy priorities, policymakers should actively pursue policies that can support sustained growth—including macro-structural reforms and green transition. Multilateral cooperation is critical to address the challenges that hold back global recovery and shadow future prosperity, including risks associated with geoeconomic fragmentation.
October 12, 2023
The Managing Director's Global Policy Agenda, Annual Meetings 2023: Building Shared Prosperity and Collective Resilience
Description: The global economy has shown resilience: macroeconomic policies are delivering, inflation is steadily declining, and financial markets have stabilized. But the recovery is slow and uneven, medium-term growth prospects are weak, and there is a risk of further divergence across countries. The key policy priorities are to (1) safeguard macroeconomic stability and rebuild buffers while enhancing prosperity through growth-oriented and green reforms and (2) bolster international cooperation to strengthen the global financial safety net and debt architecture and to support ongoing fundamental transitions that transcend borders and require joint action. The IMF—as trusted advisor, provider of financial support, and platform for cooperation—remains committed to bringing countries together to solve global challenges.
October 6, 2023
Review of the Flexible Credit Line, The Short Term Liquidity Line and the Precautionary and Liquidity Line, and Proposals for Reform
Description: The Fund’s precautionary toolkit rests on the simple proposition that facilitating crisis prevention is far less costly than crisis resolution. Its value increases with systemic risk. Serial shocks to the global trading and financial systems pose significant and persistent headwinds for well-integrated emerging markets. An adequately funded global financial safety net (GFSN) with a suite of precautionary tools allows qualifying members to respond to balance of payments (BoP) shocks, reducing the incidence of crises and limiting contagion. The Fund is the only layer of the GFSN available to all members; other layers vary in their availability and externalities. In this context, the overarching objective of this review of the Flexible Credit Line (FCL), Short-term Liquidity Line (SLL), and Precautionary and Liquidity Line (PLL) is to ensure that the precautionary facilities toolkit (henceforth “the toolkit”) is fit for purpose for the challenges ahead.
October 6, 2023
Poverty Reduction and Growth Trust—2023 Borrowing Agreements with the Government of Australia, the People’s Bank of China, the Bank of Finland, the Banque De France, De Nederlandsche Bank NV, the Norwegian Ministry of Finance Representing the Kingdom of Norway, Sveriges Riksbank, and the Government of the United Kingdom
Description: This paper presents the second set of PRGT borrowing agreements that have been finalized through April 2023 as part of the loan mobilization round launched in July 2021 to cover the cost of pandemic-related lending and support the self-sustainability of the Poverty Reduction and Growth Trust (PRGT). Seven of the eight agreements presented use SDRs in the context of SDR channeling. Together these agreements provide a total of SDR 5.1 billion in new PRGT loan resources for low-income countries (LICs).
October 6, 2023
Review of the Policy Coordination Instrument and Proposal to Eliminate the Policy Support Instrument
Description: The Policy Coordination Instrument (PCI) is a non-financial instrument, designed to help countries demonstrate their commitment to a reform agenda and unlock financing from other sources. It supports countries in designing and implementing a full-fledged macroeconomic program of policies that meet upper credit tranche standards and address imbalances, prevent crises, build buffers, and enhance stability. The PCI is available to all member countries, follows a fixed review schedule, and uses a review-based approach to monitoring conditionality. Based on a stock taking of the experience with the PCI, this review proposed reforms to ensure that the PCI remains fit-for-purpose in today’s complex global economic environment while maintaining its strong signaling function. The review also made the case for eliminating the Policy Support Instrument (PSI), which has been replaced by the PCI as the signaling instrument of choice.