A Shot in the Arm—How Special Drawing Rights Can Help Struggling Countries

2021-08-26T12:53:30-04:00August 26, 2021|

By IMFBlog

The largest allocation of Special Drawing Rights, or SDRs, in history—about $650 billion—came into effect earlier this week. The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.

The SDR allocation will provide additional liquidity to the global economic system—supplementing countries’ foreign exchange reserves and reducing their reliance on more expensive domestic or external debt. Countries can use the space provided by the SDR allocation to support their economies and step up their fight against the crisis.

SDRs are being distributed to countries in […]

Coming Together

2021-08-11T10:34:32-04:00August 10, 2021|

By Vitor Gaspar and Gita Gopinath

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Differences in vaccine access and the ability to deploy policy support are creating a growing divergence between advanced economies from many emerging market and developing economies. Faced with high deficits and historic levels of debt, countries with limited access to financing are walking a fiscal tightrope between providing adequate support and preserving financial stability. […]

Nanjing and the New International Monetary System

2017-04-15T14:27:25-04:00March 31, 2011|

I am delighted to be back in China this week for a high-level seminar in Nanjing on the international monetary system. Every time I come to this part of the world, I am impressed by the dynamism of the economies and the optimism of the people. The region’s economic performance over the past few decades has been nothing short of remarkable. To sustain this progress, Asia needs to grapple with numerous challenges today and these relate directly to our discussions in Nanjing. The current international monetary system has certainly delivered a lot. But it also has flaws that need to be fixed, especially if the next phase of globalization is to succeed in bringing a strong and broad-based increase in living standards. I see four pressing issues.

The Future of Macroeconomic Policy: Nine Tentative Conclusions

2017-04-15T14:27:54-04:00March 13, 2011|

The global economic crisis taught us to question our most cherished beliefs about the way we conduct macroeconomic policy. Earlier I had put forward some ideas to help guide conversations as we reexamine these beliefs. I was heartened by the wide online debate and the excellent discussions at a conference on post-crisis macroeconomic policy here in Washington last week. At the end of the conference, I organized my concluding thoughts around nine points. Let me go through them and see whether you agree or not.

A Stronger Financial Architecture for Tomorrow’s World

2017-04-15T14:28:20-04:00February 10, 2011|

The international monetary system is a topic that encompasses a wide range of issues—reserve currencies, exchange rates, capital flows, and the global financial safety net, to name a few. Some are of the view that the current system works well enough. I take a less sanguine view. Certainly the world did not end with the crisis that began in 2008 and a recovery is under way. But, it is not the recovery we wanted—it is uneven, unemployment is not really going down, there are widening inequalities, and global imbalances are back. Reform of the international monetary system may be wide-ranging and complex. But concrete reforms are needed to achieve the kind of well-balanced and sustainable recovery that the world needs, and to help prevent the next crisis.

Reserve Currencies in the Post-Crisis International Monetary System

2017-04-15T14:51:44-04:00September 24, 2009|

By Reza Moghadam

The dollar has been the cornerstone of the international monetary system since the Second World War. It is the most important reserve currency, accounting for at least two-thirds of reserve assets, according to the IMF’s Composition of Foreign Exchange Reserves database. Among central banks that do not report this information to the IMF, it is estimated (e.g. by Brad Setser) that 70 percent is held in dollar assets.

The bulk of foreign exchange transactions involve dollars, and significantly more trade gets settled in dollars than involves the United States. Goldberg […]

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