Search Results

You are looking at 1 - 10 of 49 items for :

  • "USD appreciation" x
Clear All
Mr. Julian T Chow, Ms. Florence Jaumotte, Mr. Seok G Park, and Ms. Yuanyan S Zhang

are easing further. Reflecting these divergences in the outlook and expected monetary policies, the USD has appreciated considerably against most major currencies, especially the euro and the yen, over the past year. The USD has also strengthened vis-à-vis most emerging market currencies, particularly those of commodity-exporting economies. Historically, periods of sharp USD appreciation have been associated with an increased number of external crises in emerging markets—hence a key concern relates to possible spillovers from a sustained period of USD appreciation

Mr. Julian T Chow, Ms. Florence Jaumotte, Mr. Seok G Park, and Ms. Yuanyan S Zhang
The recent strong, sustained appreciation of the U.S. dollar raises questions about possible financial spillover effects for emerging markets and developing countries. This report finds that, unlike past episodes, emerging markets’ vulnerability has improved along a number of dimensions, though some risks persist (as identified in this report).
Mr. Julian T Chow, Ms. Florence Jaumotte, Mr. Seok G Park, and Ms. Yuanyan S Zhang
International Monetary Fund

Corporate Debt Outstanding 11. Corporate Debt by Currencies 12. Currency Breakdown of Corporate Debt Outstanding in 2014 13. Breakdown of Total Corporate Debt 14. Breakdown of Total Corporate Income 15. Currency Breakdown of Corporate Leverage 16. Natural Hedge by Sectors 17. Interest Coverage Ratio 18. Debt at Risk (ICR <1.5) 19. EPFR Implied Allocation 20. Model Based Allocations 21. Reaction to a 14 percent USD Appreciation over 3 Months 22. Conditional Forecast Scenarios 23. A 1 Percentage Point Shock to Federal Funds Rate 24. A 1

International Monetary Fund

.S. Dollar Appreciation 7. Past episodes of sustained dollar appreciation have been associated with crises in emerging markets. Since 1980, episodes of strong and sustained U.S. dollar (USD) appreciation, 1980–85, 1995–2001, and 2008–2009, have been associated with an increase in the number of external crises in emerging market (EM) economies, though other factors such as financial overheating and balance sheet mismatches may have contributed as well in some episodes ( Figure 5 , panel 1). The 1995–2001 episode shares some features with current circumstances: the

International Monetary Fund
Many countries around the globe, particularly the systemic advanced economies, face the challenge of closing output gaps and raising potential output growth. Addressing these challenges requires a package of macroeconomic, financial and structural policies that will boost both aggregate demand and aggregate supply, while closing the shortfall between demand and supply. Each element of this package is important and one cannot substitute for the other: easy monetary policy will not raise potential output just as structural reforms will not close the output gap. This report studies the impact on emerging markets and nonsystemic advanced economies from monetary policy actions in systemic advanced economies, with a look also at knock-on effects from the decline in world oil prices.
International Monetary Fund

FX debt positions experienced smaller depreciations in 2015, with differences in FX exposure explaining roughly 20 percent of the variation in currency movements in major EMs. The role of liability dollarization in constraining exchange rate depreciation is also assessed in a panel regression involving 15 non-pegged EMs during periods of USD appreciation and negative terms of trade shocks. 1 The change in the nominal exchange rate ( %AUSDER, ) is regressed against the change in commodity terms of trade (ACToTi ), the change in USD exchange rate vis

International Monetary Fund
After narrowing in the aftermath of the global financial crisis and remaining broadly unchanged in recent years, global imbalances increased moderately in 2015, amid a reconfiguration of current accounts and exchange rates. Shifts in 2015 were driven primarily by the uneven strength of the recovery in advanced economies, the redistributive effects of the sharp fall in commodity prices, and tighter external financing conditions for emerging markets (EMs). A relatively stronger U.S. outlook led to a further appreciation of the USD and a depreciation of the yen and the euro. The sharp decline in commodity prices, reflecting both supply shocks and concerns about rebalancing and growth in China, brought about a significant redistribution of income from commodity exporters to importers, and a weakening of commodity exporters’ currencies. Meanwhile, heightened global risk aversion, contributed to softer capital inflows and depreciation pressures in many EMs. This moderate widening of current account imbalances was largely driven by systemic economies. Surpluses in Japan, the euro area and China grew, supported by improved terms of trade and currency depreciation, while the current account deficit in the U.S. widened amid the steep appreciation of the USD. These widening imbalances were only partially offset by narrowing surpluses in large oil exporters and smaller deficits in vulnerable EMs and some euro area debtor countries. Similarly, excess imbalances expanded in 2015. External positions in the U.S. and Japan moved from being broadly in line with fundamentals to being “moderately weaker” and “moderately stronger”, respectively. This was partly offset by a further narrowing of excess deficits in vulnerable EMs and euro area debtor countries. Meanwhile, excess surpluses persisted among the larger surplus countries, some of which remain “substantially stronger” than fundamentals (Germany, Korea). Currency movements since end-2015 helped to partially reverse the trends observed last year, although market volatility following the result of the U.K. referendum to leave the European Union have led to a strengthening of the USD and yen along with a weakening of the sterling, euro, and EM currencies. The implications for external assessments going forward, especially for the U.K. and the euro area, remains uncertain and will likely depend on how the transition is managed and on what new arrangements are adopted. With output below potential in most countries, and limited policy space in many, balancing internal and external objectives will require careful policy calibration. In general, a more balanced policy mix that avoids excessive reliance on policies with significant demanddiverting effects is necessary, with greater emphasis on demand-supportive measures and structural reforms. Surplus countries with fiscal space have a greater role to play in supporting global demand while reducing external imbalances. Global collective policy action, especially if downside risks materialize, would also help address global demand weakness while mitigating its effects on external imbalances.
International Monetary Fund
This note serves as a reference for balance sheet analysis, which should be read in conjunction with the IMF board paper on Balance Sheet Analysis in Fund Surveillance. It provides a: compendium of good examples of balance sheet analysis from both bilateral and multilateral surveillance, covering a variety of topics; full listing of available balance sheet related macro datasets, including their relevance for surveillance, remaining limitations, and remedial measures being undertaken; summary of data availability for each Fund member; compilation of all the tools for balance sheet analysis developed by the Fund over the last decade; and toolkit featuring some new empirical applications that could help deepen balance sheet analysis in surveillance. These include illustrations of how to construct and use BSA matrices, general equilibrium and reduced form approaches, as well as tools to analyze sectoral vulnerabilities using micro data.