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2009 (4)

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Book
The Role of the Exchange Rate in Inflation-Targeting Emerging Economies
Authors: --- --- --- --- --- et al.
ISBN: 1462340091 1452726116 Year: 2009 Publisher: Washington, D.C. : International Monetary Fund,

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Abstract

This paper explores the role of exchange rates in emerging economies with inflation-targeting regimes, an issue that has become especially germane during the current episode of financial turmoil and volatile capital flows. Under inflation targeting, the interest rate is the main monetary policy tool for influencing activity and inflation, and there is little agreement about the appropriate role of the exchange rate.The exchange rate is a more important monetary policy tool for emerging economies that have adopted inflation targeting than it is for inflation-targeting advanced economies. Inflation-targeting emerging economies generally have less flexible exchange rate arrangements and intervene more frequently in the foreign exchange market than their advanced economy counterparts. The enhanced role of the exchange rate reflects these economies' greater vulnerability to exchange rate shocks and their less developed financial markets. However, their sharper focus on the exchange rate may cause some confusion about the commitment of their central banks to achieve the inflation target and may also complicate policy implementation. Global inflation pressures, greater exchange rate volatility, and the financial stresses from the global financial turmoil that began in mid-2007 are heightening these tensions.


Book
Revised System for the Classification of Exchange Rate Arrangements
Authors: --- --- --- ---
ISBN: 1451917805 1451873581 1452757127 1282844172 9786612844171 1462320449 Year: 2009 Publisher: Washington, D.C. : International Monetary Fund,

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Abstract

Since 1998, the staff of the International Monetary Fund has published a classification of countries' de facto exchange rate arrangements. Experience in operating this classification system has highlighted a need for changes. The present paper provides information on revisions to the system in early 2009. The changes are expected to allow for greater consistency and objectivity of classifications across countries, expedite the classification process, conserve resources, and improve transparency.


Book
Ukraine : Stand-By Arrangement: Review Under the Emergency Financing Mechanism.
Authors: ---
ISBN: 1462371477 1452726167 1283565390 9786613877840 1451889399 Year: 2009 Publisher: Washington, D.C. : International Monetary Fund,

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This paper discusses key findings of the two-year Stand-By-Arrangement for Ukraine under the Emergency Financing Mechanism. Output growth is turning negative on the back of a large terms-of-trade shock and the ongoing credit crunch. The deterioration of the economic and financial situation is contributing to an increase in program implementation risks. Policy implementation is in line with the program. The authorities have introduced a flexible exchange rate regime, tightened monetary policy, and have taken measures to contain the 2008 government deficit.


Book
IMF Involvement in International Trade Policy Issues.
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ISBN: 1462389589 1451984898 158906867X Year: 2009 Publisher: Washington, D.C. : International Monetary Fund,

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Abstract

Trade policy occupies an unusual and at times problematic place in the work of the IMF. Though trade policies of IMF members have strong influences on macroeconomic stability, they are often seen as peripheral to the IMF’s core competency. This evaluation, which examines the IMF’s involvement in trade policy issues during 1996–2007, addresses five questions. What is the nature of the IMF’s mandate to cover trade policy? Did the IMF work effectively with other international organizations on trade policy issues? Did the Executive Board provide clear guidance to staff on the IMF’s role and approach to trade policy? How well did the IMF address trade policy issues through lending arrangements and surveillance? Was IMF advice effective? The evaluation finds that the IMF’s role in trade policy has evolved in some desirable and some less desirable ways and recommends how to use the limited resources the IMF can devote to trade policy to fill these gaps.

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