Gaining Currency: The Rise of the Renminbi

By IMFBlog

August 4, 2017

Eswar Prasad at an IMF conference (photo: Staff/IMF)

 
As China’s economy catches up in size with that of the United States, some economists predict that the renminbi will soon challenge the dollar’s dominance in international finance.

Continue reading “Gaining Currency: The Rise of the Renminbi” »

A Common Cause for Sustainable Growth and Stability in Central Africa

By Abebe Aemro Selassie

August 1, 2017

Version in Français (French),  Português (Portuguese), and Español (Spanish);

Woman with a machete in Bafut, Cameroon: Six countries in Central Africa have a strategy to turn their economies around, with help from the IMF (photo: Heiner Heine/imageBroker/Newscom)

Six countries in central Africa have been hit hard by the collapse in commodity prices. Oil prices dropped, economic growth stalled, public debt rose, and foreign exchange reserves declined. A delayed response from policymakers, and a regional conflict have worsened the situation further for people in the region.

The countries of the Central African Economic and Monetary Community are Gabon, Cameroon, Chad, the Central African Republic, the Republic of Congo, and Equatorial Guinea. They share a common currency—the CFA franc—that is pegged to the euro, and have a common central bank that holds the region’s pool of foreign exchange reserves. Continue reading “A Common Cause for Sustainable Growth and Stability in Central Africa” »

What We Have Seen and Learned 20 Years After the Asian Financial Crisis

By Mitsuhiro Furusawa

July 13, 2017

Versions in  عربي (Arabic), Bahasa (Indonesia),  中文 (Chinese), Español (Spanish), Français (French), 
日本語 (Japanese), Русский (Russian)

A trader in Seoul, South Korea: Asia is the largest contributor to global growth (photo: Ryu Seung-il/Polaris/Newscom)

Asia today is the fastest-growing region in the world, and the largest contributor to global growth. It has six members of the Group of Twenty advanced and emerging economies, and its economic and social achievements are well recognized.

But 20 years ago, July 1997 marked the beginning of the Asian Financial Crisis, when a combination of economic, financial and corporate problems triggered a sharp loss of confidence and capital outflows from the region’s emerging market economies. The crisis began in Thailand on July 2, when the baht’s peg to the dollar was dropped, and eventually spread to Korea, Indonesia and other countries. Continue reading “What We Have Seen and Learned 20 Years After the Asian Financial Crisis” »

Chart of the Week: Brexit and The City

By IMFBlog

May 29, 2017

It seems likely that Brexit will alter the relationship that UK-based financial firms have with the European Union—even though negotiations are just beginning.

For an idea of how much is at stake for the United Kingdom’s financial services industry, take a look at our Chart of the Week, drawn from the IMF’s latest Global Financial Stability Report. The chart illustrates the linkages that might be affected by the country’s withdrawal from the EU. One example: of the over-the-counter trading in foreign exchange derivatives in the United Kingdom, Germany and France, the UK share comes to 89 percent. Continue reading “Chart of the Week: Brexit and The City” »

How Flexible Exchange Rates Helped Latin America Adjust to Commodity Price Shocks

By Yan Carrière-Swallow, Nicolás Magud, and Juan Yépez

May 25, 2017

Versions in Português (Portuguese), and Español (Spanish)

(photo: Ivan Alvarado/Reuters/Newscom)

As world prices for Latin America’s key exports—oil, metal, and agricultural products—fell from their super-cycle peak in 2011 and demand from trading partners weakened, export revenues have dropped sharply. Across most of South America, export revenues have fallen by one-third, and by more than half in the case of Venezuela. The size of these shocks has been historic in some cases, ranking among the largest trade price busts faced by emerging economies around the world since 1960. Continue reading “How Flexible Exchange Rates Helped Latin America Adjust to Commodity Price Shocks” »

Fintech—A Brave New World for the Financial Sector?

Lagarde.2015MDPORTRAIT4_114x128By Christine Lagarde

Versions in: عربي (Arabic),  中文 (Chinese), Français (French), 日本語 (Japanese), and Español (Spanish)

From smartphones to cloud computing, technology is rapidly changing virtually every facet of society, including communications, business and government. The financial world is no exception.

As a result, the financial world stands at a critical juncture. Yes, the widespread adoption of new technologies, such as blockchain-based systems, offers many potential benefits. But it also gives rise to new risks, including risks to financial stability. That causes challenges for financial regulators, a subject I addressed at the 2017 World Government Summit in Dubai.

Continue reading “Fintech—A Brave New World for the Financial Sector?” »

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