The International Monetary Fund has decided to expand the bilateral and multilateral surveillance of the global economy to "enable early detection of risks and provide timely policy advice."
The IMF Executive Board on Wednesday approved a new decision on Bilateral and Multilateral Surveillance and the production of a Pilot External Sector Report.
These are important steps in rebooting the way the Fund conducts surveillance, the monitoring and assessment of our member countries' economies and global economic and financial developments, IMF Managing Director Christine Lagarde said.
According to her, the new decision will provide a basis for the Fund to engage more effectively with members on domestic economic and financial policies.
The new decision on bilateral and multilateral surveillance will help ensure consistency in the Fund's assessment and views on individual economies and global stability. It will make Article IV consultations a vehicle for both bilateral and multilateral surveillance.
The decision will also ensure appropriate coverage of spillovers from members' policies that may have an impact on global stability.
Meanwhile, the Pilot report will assess the developments in global external positions and point to potential policy responses. It uses the newly-developed pilot External Balance Assessment approach together with judgment to assess external balances.
The report will help broaden the focus of the Fund's external sector surveillance to encompass more systematically, in addition to exchange rates, developments in current accounts, capital accounts, reserve accumulation, capital flow measures, and foreign assets and liabilities.
Lagarde said this was a test run and the IMF will further refine the new methodology and analysis over coming months.
by RTT Staff Writer
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