{
  "title": "Methodology for Current Account and Exchange Rate Assessments",
  "publication": "Occasional Papers, December 28, 2001",
  "sourceUrl": "https://www.imf.org/en/publications/occasional-papers/issues/2016/12/30/methodology-for-current-account-and-exchange-rate-assessments-15360",
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  "summary": "This chapter reports on Coordinating Group on Exchange Rate Issues’ (CGER) works and provides perspectives on alternative frameworks for assessing exchange rates and the rationale for CGER's general approach.",
  "sections": [
    {
      "heading": "CGER purpose and motivation",
      "content": "- Primary motivation: identify cases where exchange rates appear to be substantially out of line with medium-run macroeconomic fundamentals.\n- Recognizes that such situations can have different interpretations depending on the cyclical positions of economies and other circumstances.\n- Work reported is that of the Coordinating Group on Exchange Rate Issues (CGER)."
    },
    {
      "heading": "Macroeconomic balance framework",
      "content": "- Assessments of exchange rates among industrial country currencies rely primarily on an application of a macroeconomic balance framework.\n- Framework focus: the extent to which the current account positions associated with prevailing exchange rates are consistent with medium-run fundamentals.\n- Emphasis on real exchange rates and the saving-investment balance as central determinants in the assessment."
    },
    {
      "heading": "Implications for IMF surveillance",
      "content": "- Substantial discrepancies between exchange rates and their medium-run equilibrium levels, when they emerge, raise two different, however related issues for the IMF to address in its exercise of bilateral and multilateral Surveillance.\n- These assessments inform IMF engagement in both bilateral and multilateral contexts."
    },
    {
      "heading": "Core analytical considerations",
      "content": "- Cyclical positions of economies are explicitly recognized as affecting interpretation of exchange rate assessments.\n- The methodology provides perspectives on alternative frameworks for assessing exchange rates and the rationale for CGER's general approach.\n\nInternational Monetary Fund\n\n---\n\n\nSource: https://www.imf.org/en/publications/occasional-papers/issues/2016/12/30/methodology-for-current-account-and-exchange-rate-assessments-15360"
    }
  ],
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    "[Markdown version](/en/publications/occasional-papers/issues/2016/12/30/methodology-for-current-account-and-exchange-rate-assessments-15360/index.md)",
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    "Authors: G. Russell Kincaid, Martin Fetherston, Peter Isard, Hamid Faruqee",
    "Published: December 28, 2001",
    "Series: Occasional Papers",
    "DOI: https://doi.org/10.5089/9781589060814.084",
    "Primary motivation: identify cases where exchange rates appear to be substantially out of line with medium-run macroeconomic fundamentals.",
    "Recognizes that such situations can have different interpretations depending on the cyclical positions of economies and other circumstances.",
    "Work reported is that of the Coordinating Group on Exchange Rate Issues (CGER).",
    "Assessments of exchange rates among industrial country currencies rely primarily on an application of a macroeconomic balance framework.",
    "Framework focus: the extent to which the current account positions associated with prevailing exchange rates are consistent with medium-run fundamentals.",
    "Emphasis on real exchange rates and the saving-investment balance as central determinants in the assessment.",
    "Substantial discrepancies between exchange rates and their medium-run equilibrium levels, when they emerge, raise two different, however related issues for the IMF to address in its exercise of bilateral and multilateral Surveillance.",
    "These assessments inform IMF engagement in both bilateral and multilateral contexts.",
    "Cyclical positions of economies are explicitly recognized as affecting interpretation of exchange rate assessments.",
    "The methodology provides perspectives on alternative frameworks for assessing exchange rates and the rationale for CGER's general approach."
  ],
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