{ "title": "Lessons from Haiti’s Recent Exchange Rate Developments", "publication": "IMF Working Papers, November 11, 2022", "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635", "canonical": "https://www.imf.org/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635", "overlayPath": "/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/index.md", "summary": "From August to October 2020, the Haitian authorities were successful at bringing about a sharp appreciation in the gourde/U.S. dollar exchange rate. This paper analyzes the factors behind this appreciation and its spillovers on the economy.", "sections": [ { "heading": "Summary findings", "content": "- From August to October 2020, the Haitian authorities were successful at bringing about a sharp appreciation in the gourde/U.S. dollar exchange rate.\n- Foreign exchange surrender requirements had a statistically significant effect on the nominal exchange rate.\n- Foreign exchange intervention by the central bank did not have a statistically significant effect on the nominal exchange rate.\n- Surrender requirements raised trading costs and volatility in the foreign exchange market.\n- Surrender requirements contributed to the development of a wider parallel nominal exchange rate premium.\n- The appreciation contributed to a decline in headline inflation during the episode.\n- The appreciation delivered some fuel subsidy-related savings to the government.\n- Remittance-dependent households and exporters experienced a drop in their purchasing power.\n- Haiti’s net external buffers were adversely affected." }, { "heading": "Analysis of mechanisms and spillovers", "content": "- Policy tool effectiveness:\n - Foreign exchange surrender requirements: statistically significant impact on nominal exchange rate; increased trading costs and volatility; widened parallel nominal exchange rate premium.\n - Central bank foreign exchange intervention: no statistically significant effect on the nominal exchange rate.\n- Real economy and fiscal spillovers:\n - Headline inflation declined during the appreciation episode.\n - Government realized some savings related to fuel subsidies.\n - Remittance-dependent households: lower purchasing power.\n - Exporters: lower purchasing power.\n - Net external buffers: adverse effect noted." }, { "heading": "Policy recommendations and implications", "content": "- Facilitate foreign exchange management to reduce market distortions created by surrender requirements.\n- Boost external sustainability to rebuild net external buffers while aligning measures with the central bank’s overall policy objectives.\n- Design interventions and regulatory measures mindful of distributional effects on remittance-dependent households and exporters.\n- Consider alternatives to surrender requirements that minimize trading costs, volatility, and the growth of parallel market premia." }, { "heading": "Publication and metadata", "content": "- Authors: Rina Bhattacharya, Neil Shenai\n- Publication date: November 11, 2022\n- Series: Working Paper No. 2022/225\n- Issue: 225\n- Volume: 2022\n- Pages: 45\n- DOI: https://doi.org/10.5089/9798400226038.001\n- ISBN: 9798400226038\n- ISSN: 1018-5941\n- Subject keywords: Currency markets, Exchange rate arrangements, Exchange rates, Financial markets, Foreign exchange, Nominal effective exchange rate\n- Geographic/ thematic keywords: Caribbean, Central America, Haiti, fragile state monetary policy, foreign exchange surrender requirements, reserve money programming in fragile states\n\nIMF Working Papers — Lessons from Haiti’s Recent Exchange Rate Developments (Working Paper No. 2022/225), Rina Bhattacharya and Neil Shenai, November 11, 2022.\n\n---\n\n Content in this bundle\n\n- Working Paper\n - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635" } ], "bullets": [ "[Markdown version](/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/index.md)", "[Structured JSON version](/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/index.json)", "[Bundle manifest](/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/bundle-manifest.json)", "Authors: Rina Bhattacharya, Neil Shenai", "Published: November 11, 2022", "Series: IMF Working Papers", "DOI: https://doi.org/10.5089/9798400226038.001", "From August to October 2020, the Haitian authorities were successful at bringing about a sharp appreciation in the gourde/U.S. dollar exchange rate.", "Foreign exchange surrender requirements had a statistically significant effect on the nominal exchange rate.", "Foreign exchange intervention by the central bank did not have a statistically significant effect on the nominal exchange rate.", "Surrender requirements raised trading costs and volatility in the foreign exchange market.", "Surrender requirements contributed to the development of a wider parallel nominal exchange rate premium.", "The appreciation contributed to a decline in headline inflation during the episode.", "The appreciation delivered some fuel subsidy-related savings to the government.", "Remittance-dependent households and exporters experienced a drop in their purchasing power.", "Haiti’s net external buffers were adversely affected.", "Policy tool effectiveness:", "Real economy and fiscal spillovers:", "Facilitate foreign exchange management to reduce market distortions created by surrender requirements.", "Boost external sustainability to rebuild net external buffers while aligning measures with the central bank’s overall policy objectives.", "Design interventions and regulatory measures mindful of distributional effects on remittance-dependent households and exporters.", "Consider alternatives to surrender requirements that minimize trading costs, volatility, and the growth of parallel market premia.", "Authors: Rina Bhattacharya, Neil Shenai", "Publication date: November 11, 2022", "Series: Working Paper No. 2022/225", "Issue: 225", "Volume: 2022", "Pages: 45", "DOI: https://doi.org/10.5089/9798400226038.001", "ISBN: 9798400226038", "ISSN: 1018-5941", "Subject keywords: Currency markets, Exchange rate arrangements, Exchange rates, Financial markets, Foreign exchange, Nominal effective exchange rate", "Geographic/ thematic keywords: Caribbean, Central America, Haiti, fragile state monetary policy, foreign exchange surrender requirements, reserve money programming in fragile states", "**Working Paper**" ], "related": [ { "title": "Working Paper", "role": "paper", "sourceUrl": "https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022225-print-pdf.pdf", "summary": { "path": "/-/media/files/publications/wp/2022/english/wpiea2022225-print-pdf.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/wp/2022/english/wpiea2022225-print-pdf.pdf", "mime": "application/pdf" } } ], "alternates": { "markdown": "/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/index.md", "json": "/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/index.json", "bundleManifest": "/en/publications/wp/issues/2022/11/11/lessons-from-haitis-recent-exchange-rate-developments-525635/bundle-manifest.json" }, "generatedAtUtc": "2026-09-16T21:50:17.997Z" }