{
  "title": "How to Set Up A Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy",
  "publication": "IMF How To Notes, December 21, 2020",
  "sourceUrl": "https://www.imf.org/en/publications/fiscal-affairs-department-how-to-notes/issues/2020/12/21/how-to-set-up-a-cash-buffer-a-practical-guide-to-developing-and-implementing-a-cash-buffer-49955",
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  "summary": "Maintaining a cash buffer has emerged as a risk management tool for government cash and debt management. During budget execution, there is considerable cash flow volatility and timing mismatches concerning revenue collections and expenditures, debt inflows, and debt service.",
  "sections": [
    {
      "heading": "Role and rationale for a cash buffer",
      "content": "- Maintains liquidity in government bank accounts during budget execution when there is considerable cash flow volatility and timing mismatches concerning revenue collections and expenditures, debt inflows, and debt service.\n- From a debt management perspective, holding an appropriate level of cash balance serves to mitigate funding risk.\n- Effective cash balance management is especially critical when there is heightened uncertainty about the magnitude and timing of cash flows, exemplified by the coronavirus disease (COVID-19) pandemic."
    },
    {
      "heading": "Practical approaches to developing a cash buffer policy",
      "content": "- Discusses the role of the cash buffer for managing cash balances.\n- Offers practical approaches to developing a policy framework that balance:\n  - Risk mitigation objectives.\n  - The cost of carry (opportunity cost of holding cash)."
    },
    {
      "heading": "Key findings and themes",
      "content": "- Cash balance management aims to address timing mismatches and ensure availability of liquidity.\n- A cash buffer is both a cash management and a debt management tool.\n- The policy framework should explicitly consider trade-offs between reducing funding risk and the cost of holding cash."
    },
    {
      "heading": "Publication and metadata (as stated in the source)",
      "content": "- Authors: Yasemin Hurcan, Emre Balibek, Fatoş Koç\n- Date: December 21, 2020\n- Pages: 31\n- Volume: 2020\n- Issue: 004\n- Series: How-To Note No. 2020/004\n- DOI: https://doi.org/10.5089/9781513563848.061\n- Stock No: HTNEA2020004\n- ISBN: 9781513563848\n- ISSN: 2522-7912\n- Citation preview (format: Chicago): Yasemin Hurcan, Emre Balibek, and Fatoş Koç. \"How to Set Up A Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy\", IMF How To Notes 2020, 004 (2020), accessed 6/25/2026, https://doi.org/10.5089/9781513563848.061\n\nInternational Monetary Fund — How To Note No. 2020/004\n\n---\n\n Content in this bundle\n\n- How to Set Up a Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy\n  - How to Set Up a Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - How to Set Up a Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fiscal-affairs-department-how-to-notes/issues/2020/12/21/how-to-set-up-a-cash-buffer-a-practical-guide-to-developing-and-implementing-a-cash-buffer-49955"
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    "Authors: Yasemin Hurcan, Emre Balibek, Fatoş Koç",
    "Published: December 21, 2020",
    "Series: IMF How To Notes",
    "DOI: https://doi.org/10.5089/9781513563848.061",
    "Maintains liquidity in government bank accounts during budget execution when there is considerable cash flow volatility and timing mismatches concerning revenue collections and expenditures, debt inflows, and debt service.",
    "From a debt management perspective, holding an appropriate level of cash balance serves to mitigate funding risk.",
    "Effective cash balance management is especially critical when there is heightened uncertainty about the magnitude and timing of cash flows, exemplified by the coronavirus disease (COVID-19) pandemic.",
    "Discusses the role of the cash buffer for managing cash balances.",
    "Offers practical approaches to developing a policy framework that balance:",
    "Cash balance management aims to address timing mismatches and ensure availability of liquidity.",
    "A cash buffer is both a cash management and a debt management tool.",
    "The policy framework should explicitly consider trade-offs between reducing funding risk and the cost of holding cash.",
    "Authors: Yasemin Hurcan, Emre Balibek, Fatoş Koç",
    "Date: December 21, 2020",
    "Pages: 31",
    "Volume: 2020",
    "Issue: 004",
    "Series: How-To Note No. 2020/004",
    "DOI: https://doi.org/10.5089/9781513563848.061",
    "Stock No: HTNEA2020004",
    "ISBN: 9781513563848",
    "ISSN: 2522-7912",
    "Citation preview (format: Chicago): Yasemin Hurcan, Emre Balibek, and Fatoş Koç. \"How to Set Up A Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy\", IMF How To Notes 2020, 004 (2020), accessed 6/25/2026, https://doi.org/10.5089/9781513563848.061",
    "**How to Set Up a Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy**"
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