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International Monetary Fund. African Dept.
This Selected Issues paper provides an overview of the nature and scope of corresponding banking relationships (CBRs) withdrawals in Cabo Verde and discusses policy options to address this challenge. The paper reports the results of a bank level survey and employs the minimum scope framework developed by Grolleman and Jutrsa (2017) on Cabo Verdean bank level data for 2014–2017. Banks in Cabo Verde have experienced a reduction in CBRs since 2013. Bank level survey shows that the terminations are broad based and involves both the central bank and commercial banks. The impact on the banking system has so far been minimal but banks reported facing increased cost of US dollar transactions. The results using the minimum scope framework shows that value of payment flows declined significantly between 2014 and 2016. There is a need for coordinated efforts by all relevant stakeholders at the institutional, national, and regional levels to contribute their knowledge and skills to the resolution of the problem.
International Monetary Fund. African Dept.

number of initiatives to address the specific drivers and mitigate the potential macroeconomic impacts are being considered, and some are already being implemented . The focus of the initiatives has been on preventing the withdrawal of CBRs from reaching alarming levels given the muted macroeconomic impact thus far. Top ACs Providing USD Accounts (in percent of total) Source: IMF Staff estimates. Top ACs Providing EUR Accounts (in percent of total) Source: IMF Staff estimates. 24. The Cabo Verdean government has initiated measures to

International Monetary Fund. African Dept.
International Monetary Fund. Statistics Dept.

code for transfers (the position on the nostro account in EUR will decrease because of the sale). In the Report Form on the USD account the position will grow as a result of the purchase of this currency, so a credit entry has to be reported with the code for neutral transfers at the amount of USD 150. Bank X nostro EUR Bank X nostro USD BP CR DR EP BP CR DR EP 2000 1000 100 NC 150 900 1150 BP = position at the beginning of period EP = position at

Dirk Jan Grolleman and David Jutrsa
The withdrawal of correspondent banking relationships (CBRs) remains a concern for the international community because, in affected jurisdictions, the decline could have potential adverse consequences on international trade, growth, financial inclusion, and the stability and integrity of the financial system. Building on existing initiatives and IMF technical assistance, this paper discusses a framework that can be readily used by central banks and supervisory authorities to effectively monitor the developments of CBRs in their jurisdiction. The working paper explains the monitoring framework and includes the necessary reporting templates and an analytical tool for the collection of data and analysis of CBRs.
International Monetary Fund. Asia and Pacific Dept

. Consequently, international correspondent banks were finding it less attractive to hold correspondent banking relationships (CBRs) with banks in Pacific island countries (PICs) due to the high costs of AML/CFT compliance and low profitability of transactions. In 2019, the Pacific region saw the largest yearly decline (about 6 percent) in CBRs compared to other regions, including the Caribbean. The number of active correspondents of USD account has more severely fallen in PICs. In 2021, the recent termination of CBRs by an Australian bank with several domestic banks in PICs

International Monetary Fund. Monetary and Capital Markets Department

USD 5000,000 for 30 days Bid Offer Amount tendered 500,000 500,000 Spot USD per Local Currency (LC) 0.0819 0.0826 Forward points for one month forward 18 15 One month forward rate 0.0801 0.0811 Source: Fund Staff calculations. Accounting on Origination Spot transaction LC LC DR Commercial; Bank 6,053,269 500,000 / 0.0826 CR USD Account 6,053,269 Days spot rate for euro Need to calculate the forward leg. Swaps payable

International Monetary Fund. Statistics Dept.
This technical advice provided by the staff of the IMF to the authorities of Afghanistan in response to their request for technical assistance (TA). The mission objectives were to assist the Da Afghanistan Bank (DAB) in improving the quality of the balance of payments and international investment position (IIP) statistics. The mission took stock of recent improvements in the ESS compilation practices and commended the DAB’s Monetary Policy Department (MPD) for achieving most of the 2018 TA recommendations. Despite the progress achieved, major shortcomings remain to be addressed to enhance the policy relevance of external sector statistics (ESS) data. The highest priority should be given to the improvement of personal transfer’s coverage and the estimation of unrecorded personal transfers. Remittances through autonomous Money Service Providers and informal channels are not captured; although, there seems to be a large remittance channel. The inclusion of the opium economy will have significant impact in the national and international accounts.
International Monetary Fund. European Dept.

extent possible. 19 The FIU has conducted a separate assessment of the business plans of BSFCs in parallel with the re-structuring exercise conducted by the FCMC. It is unclear whether the conclusions of two agencies share a common set of priorities and focus areas. 20 The FCMC has periodically included plausible stress test scenarios for BSFCs, such as the escalation of geopolitical risks and the complete closure of USD accounts. 21 Liquidity stress tests inform a comprehensive assessment of whether banks’ own internal resources (i.e., liquidity

International Monetary Fund. Monetary and Capital Markets Department
The CBS has taken steps to establish important pillars of a proper policy framework for financial reporting, auditing, and internal controls by approving the Internal Audit and Audit Committee Charters and is committed to address the remaining shortcomings in these areas. The Internal Audit Department (IAD) has made progress by initiating risk assessments of the various CBS business units and recruiting an Information Technology (IT) professional to join the team. The Accounting and Finance Department (AFD) is making progress in implementing accrual accounting, and accounting for foreign exchange operations (International Accounting Standard (IAS) 21), and has created a new role of Reconciliation Officer to ensure all cash transactions are recorded properly. However, the IAD functions without a director, which places the internal audit staff at a severe disadvantage to other departments and limits their authority to effectively implement their program. Also, while the mission team has stressed the importance of adopting International Financial Reporting Standards (IFRS) during this mission and the previous mission, the CBS has not formally indicated that it will adopt this framework.2 High priority recommendations were made to address these shortcomings. See Table 1 for homework assignments and high priority tasks.3