## Guidance Note on The Liberalization and Management of Capital Flows

_Policy Papers, December 11, 2023_

## Source details

**Canonical URL:** [Guidance Note on The Liberalization and Management of Capital Flows](https://www.imf.org/en/publications/policy-papers/issues/2023/12/11/guidance-note-on-the-liberalization-and-management-of-capital-flows-542289)

## Other formats

- [Markdown version](/en/publications/policy-papers/issues/2023/12/11/guidance-note-on-the-liberalization-and-management-of-capital-flows-542289/index.md)
- [Structured JSON version](/en/publications/policy-papers/issues/2023/12/11/guidance-note-on-the-liberalization-and-management-of-capital-flows-542289/index.json)
- [Bundle manifest](/en/publications/policy-papers/issues/2023/12/11/guidance-note-on-the-liberalization-and-management-of-capital-flows-542289/bundle-manifest.json)

## Bibliographic details
- Published: December 11, 2023
- Series: Policy Papers
- DOI: https://doi.org/10.5089/9798400261053.007

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### Purpose and scope
- Provides operational guidance to staff on the use of the Fund’s institutional view (IV) on the liberalization and management of capital flows.
- Establishes a framework for consistent policy advice and assessments of members’ capital flow policies when relevant for surveillance.
- Clarifies that the IV:
  - Does not alter the rights and obligations of members under the Fund’s Articles of Agreement or other international agreements.
  - Has no mandatory implications for the Fund’s financing role.
- Replaces the 2013 guidance note and the 2015 note on further operational considerations and incorporates guidance on new elements introduced in the 2022 review of the IV.
- Publication date: December 11, 2023.

### Core premises and analytical approach
- Premise: Capital flows are desirable because they can bring substantial benefits for countries, but they may also generate risks.
- Role of measures:
  - Capital flow management measures (CFMs) can be useful in certain circumstances.
  - Measures that are both CFMs and macroprudential measures (MPMs), i.e., CFM/MPMs, can also be useful.
  - CFMs and CFM/MPMs should not substitute for warranted macroeconomic adjustment.
- Surveillance guidance: Staff should discuss capital flows and related policies in surveillance when:
  - These are macro-critical, or
  - Spillovers from those policies significantly influence the effective operation of the international monetary system.

### Key findings and policy implications
- Objective: Help countries reap the benefits of capital flows while managing associated risks to preserve macroeconomic and financial stability and avoid significant negative outward spillovers.
- Emphasis on:
  - Consistent application of the IV in policy advice and assessments.
  - Balancing liberalization benefits against potential financial and macroeconomic risks.
  - Ensuring CFMs/CFM-MPMs are part of a broader policy package that includes appropriate macroeconomic adjustment.

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## Content in this bundle

- **Policy Paper**
  - [Policy Paper (Markdown version)](/-/media/files/publications/pp/2023/english/ppea2023055.pdf.md){rel="alternate" type="text/markdown"}
  - [Policy Paper (PDF)](/-/media/files/publications/pp/2023/english/ppea2023055.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/policy-papers/issues/2023/12/11/guidance-note-on-the-liberalization-and-management-of-capital-flows-542289_