Ms. Kazuko Shirono, Esha Chhabra, Ms. Bidisha Das, Ms. Yingjie Fan, and Mr. Hector Carcel Villanova
The rapid uptake of mobile money in recent years has generated new data needs and growing interest in understanding its impact on broad money. This paper reviews mobile money trends using mobile money data from the Financial Access Survey (FAS) and examines the statistical treatment of mobile money under the IMF’s Monetary and Financial Statistics (MFS) framework. MFS guidance is straightforward in most cases, as many jurisdictions have adopted regulations which ensure that mobile money is captured in the banking system and thus in the calculation of broad money. However, in cases where mobile network operators (MNOs) act as niche financial intermediaries outside the banking regulatory perimeter and are allowed to invest their customer funds in sovereign securities and other permitted assets, mobile money liabilities may remain outside the banking system as well as monetary statistics. In that case, information on mobile money liabilities need to be collected directly from MNOs to account for mobile money as part of broad money.
Using firm-level data on ASEAN5, this paper studies the differential effects of macro-financial and structural factors on corporate saving behavior through the lens of external financing dependence. The finding suggests that non-financial corporations in ASEAN5 have been subject to binding financial constraints over the past two decades. Greater capital account openness or exchange rate depreciation reduces the average saving rate of industries with low dependence on external funds, while it increases the saving rate of industries with high dependence on external funds. The effects are greater for export-oriented industries. An improvement in banking sector competition, banksâ€™ lending efficiency, or policy clarity is associated with lower saving rate of firms across the board.
Non-deliverable forward (NDF) markets in many Asian emerging market currencies are large, rapidly growing, and often exceed onshore markets in transaction volume. NDFs tend to price significant depreciation during market stress episodes including COVID-19. Spillovers from NDFs to onshore markets are a policymaker concern. Our analysis shows that influences tend to run both ways after controlling for differences in timezones between markets. For the COVID-19 pandemic there is some evidence of NDFs leading onshore markets for a few currencies. Policy approaches to NDFs vary widely across Asia from close integration with onshore markets to severe restrictions on NDF trading.
Emerging economies in the post-crisis period increasingly saw portfolio debt inflows from a type of large international investment fund: Multi-Sector Bond Funds (MSBFs). These investors have lacked adequate representation in the literature. This paper constructs a new detailed database from micro-level MSBF emerging market (EM) holdings from 2009:Q4–2018:Q2. Exploiting this data, the paper assesses the risks they pose to the financial stability of specific emerging bond markets. The data shows that MSBFs are highly concentrated–both in their positions and their decision-making. The empirical results further suggest that MSBFs exhibit opportunistic behavior (and more so than other investment funds). In periods of high risk aversion, large MSBF portfolio reallocations out of EMs can be associated with underperformance of the same markets, signaling the importance of monitoring their footprint and better understanding their asset allocation decisions.
International Monetary Fund. Asia and Pacific Dept
This Selected Issues paper analyzes the impact of environment and climate change on Vietnam’s economic growth. Vietnam’s economy and population are expected to be increasingly affected by climate change. In addition, the country’s growth model—which permitted quick reduction of poverty—has been unsustainably relying on mining and natural resources. The level of air, land and water pollution has also increased in the country. Well aware of the critical challenges faced by the country, the government has undertaken numerous initiatives and programs to adapt the economy to climate change risks and transform the growth model to support an environmental-friendly economy, but significant challenges remain.