From Lombard Street to Avenida Paulista
From Lombard Street to Avenida Paulista

Author: W. Christopher Walker

Publisher: International Monetary Fund

Published: 2009-11-01

Total Pages: 37

ISBN-13: 1451874057

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The provision of foreign exchange liquidity by emerging market central banks during the global shock of 2008-09 departs from the domestic liquidity lender of last resort role described by Bagehot in his classic "Lombard Street." This paper documents and analyzes the foreign exchange liquidity providing measures of the Banco Central do Brasil (BCB) in response to varied market stresses. These measures appear to have reduced the relative onshore cost of dollar liquidity on impact and seemed to stabilize market expectations of exchange rate volatility. The results suggest that foreign exchange liquidity easing operations may become a standard central bank tool.

Emerging Economy Responses to the Global Financial Crisis of 2007–09 - An Empirical Analysis of the Liquidity Easing Measures
Emerging Economy Responses to the Global Financial Crisis of 2007–09 - An Empirical Analysis of the Liquidity Easing Measures

Author: Mr.Etienne B. Yehoue

Publisher: International Monetary Fund

Published: 2009-12-01

Total Pages: 36

ISBN-13: 1451874103

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This paper draws on a unique data set on the nontraditional systemic liquidity easing measures recently undertaken by many emerging market economies. It offers an empirical analysis of the key determinants affecting the decision to undertake these measures over the period September 2008-March 2009. The paper finds that economy size, access to international credit markets, CDS spreads, currency depreciation, and current account balances are among the key factors influencing the adoption of these measures. It provides a rationale for the differences in central bank policy responses, which reflect differences in economic structures rather than conflicting views on fundamental principles. The paper also provides a preliminary assessment of the effectiveness of these measures and points out that despite their positive impacts, they have not fully shielded the real economy from the recent financial meltdown.

Regional Economic Outlook, May 2010, Western Hemisphere
Regional Economic Outlook, May 2010, Western Hemisphere

Author: International Monetary Fund. Western Hemisphere Dept.

Publisher: INTERNATIONAL MONETARY FUND

Published: 2010-05-10

Total Pages: 82

ISBN-13: 9781589069213

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A multispeed global recovery is under way, with some emerging markets in the lead and the major advanced economies growing more slowly. This macroeconomic setting has brought a return to easy global financial conditions and high commodity prices-a situation likely to be sustained for some time but unlikely to be permanent. Against that external backdrop, the recovery in the Latin America and Caribbean region overall is advancing faster than anticipated, but moving at different speeds across countries. The report discusses the varying policy challenges that different countries face as the global recovery proceeds. Chapter 1 analyzes the global setting and the outlook for the United States and Canada in particular, while Chapter 2 focuses on the outlook for Latin America and the Caribbean. Chapter 3 looks in depth at the challenges arising from the return of easy external financial conditions. Together with high commodity prices, such conditions represent favorable "tailwinds" for many countries of the region, but also carry risks for policymakers to address.

Russian Federation
Russian Federation

Author: International Monetary Fund. European Dept.

Publisher: International Monetary Fund

Published: 2013-10-22

Total Pages: 77

ISBN-13: 1484316274

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This Selected Issues paper analyzes the impact of the adoption of inflation targeting (IT) on exchange rate volatility in Russian Federation. Russia has seen an increase in exchange rate volatility during the past few years compared with the period before the global financial crisis, as the authorities have chosen to allow a higher degree of ruble exchange rate flexibility in preparation for the adoption of IT. The average of the 12-month coefficient of variation of the ruble/dollar exchange rate has also increased from 2.2 percent in December 2005–September 2008 to about 3.7 percent in March 2010–June 2013.

Brazil
Brazil

Author: International Monetary Fund. Western Hemisphere Dept.

Publisher: International Monetary Fund

Published: 2015-05-12

Total Pages: 102

ISBN-13: 1475588151

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This Selected Issues paper examines infrastructure investment in Brazil. Brazil has inferior overall infrastructure quality relative to almost all its export competitors. Brazil’s infrastructure endowment ranks low by international standards, and its low quality affects productivity, market efficiency, and competitiveness. Areas in which Brazil’s competitiveness has lagged include, but are not limited to, education, innovation, governance, and justice. Brazil’s infrastructure gap has become a major obstacle to growth and filling this gap will entail increasing investment and also stepping up other reforms.

Unveiling the Effects of Foreign Exchange Intervention
Unveiling the Effects of Foreign Exchange Intervention

Author: Gustavo Adler

Publisher: International Monetary Fund

Published: 2015-06-23

Total Pages: 42

ISBN-13: 1513534602

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We study the effect of foreign exchange intervention on the exchange rate relying on an instrumental-variables panel approach. We find robust evidence that intervention affects the level of the exchange rate in an economically meaningful way. A purchase of foreign currency of 1 percentage point of GDP causes a depreciation of the nominal and real exchange rates in the ranges of [1.7-2.0] percent and [1.4-1.7] percent respectively. The effects are found to be quite persistent. The paper also explores possible asymmetric effects, and whether effectiveness depends on the depth of domestic financial markets.