## Exchange Rate Policy (ERP)

## Source details

**Canonical URL:** [Exchange Rate Policy (ERP)](https://www.imf.org/en/capacity-development/training/icdtc/schedule/ce/2024/erpce24-25)

## Other formats

- [Markdown version](/en/capacity-development/training/icdtc/schedule/ce/2024/erpce24-25/index.md)
- [Structured JSON version](/en/capacity-development/training/icdtc/schedule/ce/2024/erpce24-25/index.json)
- [Bundle manifest](/en/capacity-development/training/icdtc/schedule/ce/2024/erpce24-25/bundle-manifest.json)

## Bibliographic details
- Session: CE 24.25
- Location: Kuwait City, Kuwait
- Dates: October 27, 2024 - November 7, 2024 (2 weeks)
- Delivery method: In-person Training
- Primary language: English
- Status: Deadline passed

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### Target audience and qualifications
- Target Audience: Junior to mid-level officials who work with exchange rate policy and analysis.
- Qualifications:
  - Participants are expected to have an advanced degree in economics or equivalent professional experience.
  - Participants are expected to be comfortable with Microsoft Excel and Excel-based applications.
  - Participants are expected to also have a working knowledge of EViews.

### Course description — topics covered
- Key exchange rate concepts:
  - real, nominal, bilateral, multilateral, spot, forward
  - arbitrage conditions: UIP, law of one price, PPP, relative PPP
- Role of exchange rates in macroeconomic objectives:
  - achieving internal and external balance (adjustment to overall equilibrium under floating and fixed exchange rate regimes)
  - role in economic growth (undervaluation, Washington Consensus, the Balassa-Samuelson effect)
- Exchange rate policy and regimes:
  - taxonomy, impossible trinity
  - associated policy mix: monetary policy independence, financial stability, fiscal policy, capital controls
- Practical problems in Developing and Emerging Market Economies:
  - concerns of excessive volatility; de jure vs. de facto regimes; competitiveness, price stability; exchange-rate pass-through; targets and instruments
- Transitions from rigid to flexible exchange rate regimes:
  - motives; speed of transition; deep and liquid domestic FX markets, derivatives markets, coherent intervention policy, nominal anchor; transition sequence
- FX interventions:
  - sterilized or non-sterilized; motivations, channels, effectiveness, instruments, tactics, policy communication
- Currency crisis:
  - causes, role of macroeconomic and prudential policies
- Assessing reserve adequacy:
  - ARA
- External Balance Assessment:
  - EBA
- Early warning systems:
  - constructing systems for early warning of currency crises

### Course objectives
- Assess reserve adequacy with traditional and the IMF ARA metric.
- Assess external balance position with EBA and EBA-lite methodologies.
- Construct systems for early warning of currency crises using data on nominal exchange rates and international reserves.
- Describe the exchange rate regime choice and how country-specific features could influence the choice.

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## References

- [In-person Training](https://www.imf.org/en/capacity-development/training/icdtc/delivery-methods)
- [Core Elements of Banking Supervision (CBS)](https://www.imf.org/en/capacity-development/training/icdtc/schedule/at/2027/cbsat27-10)
- [Advanced Government Finance Statistics (GFS-A)](https://www.imf.org/en/capacity-development/training/icdtc/schedule/ce/2026/gfs-ace26-45)
- [Fiscal Sustainability (FS)](https://www.imf.org/en/capacity-development/training/icdtc/schedule/ce/2026/fsce26-38)
- [Safeguards Assessments of Central Banks (SAC)](https://www.imf.org/en/capacity-development/training/icdtc/schedule/at/2026/sacat26-30)
- [Macroeconomic Management in Resource Rich Countries (MRC)](https://www.imf.org/en/capacity-development/training/icdtc/schedule/ce/2026/mrcce26-44)

_Source: https://www.imf.org/en/capacity-development/training/icdtc/schedule/ce/2024/erpce24-25_