Guidelines for Foreign Exchange Reserves Management
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The guidelines are intended to assist governments in strengthening their policy frameworks for reserve management so as to help increase their country's resilience to shocks that may originate from global financial markets or within the domestic financial system. The aim is to help the authorities articulate appropriate objectives and principles for reserve management and build adequate institutional and operational foundations for good reserve management practices. The guidelines identify areas of broad agreement among practitioners on reserve management principles and practices that are applicable to a broad range of countries at different stages of development and with various institutional structures for reserve management. In doing so, the guidelines serve to disseminate sound practices more widely, while recognizing that there is no unique set of reserve management practices or institutional arrangements that is best for all countries or situations. In this respect, they should be regarded as nonmandatory and should not be viewed as a set of binding principles. In their usage, the guidelines are intended primarily for voluntary application by members in strengthening their policies and practices. They could also play a useful role in the context of technical assistance and, as warranted, as a basis for informed discussion between the authorities and the Fund on reserve management issues and practices. Although institutional arrangements and general policy environments can differ, surveys of actual practices indicate that there is increasing convergence on what are considered sound reserve management practices that taken together constitute a broad framework for reserve management. In the context of this paper, these practices are reflected in guidelines that encompass: (i) clear objectives for the management of reserves; (ii) a framework of transparency that ensures accountability and clarity of reserve management activities and results; (iii) sound institutional and governance structures; (iv) prudent management of risks; and (v) the conduct of reserve management operations in efficient and sound markets.
International Endorsement : Endorsed (approved) by IMF Board. In developing the guidelines, Fund staff worked in close collaboration with reserve management entities from a broad group of IMF member countries and international institutions in a comprehensive outreach process. The outreach process included regional meetings in Abu Dhabi, Basel, Gaborone, Mexico City, Singapore, and Washington DC to discuss earlier versions of the guidelines. The practitioners' insight that this process brought to the guidelines has enabled the enunciation of broadly applicable principles as well as institutional and operational foundations that have relevance for members with a wide range of institutional structures at different stages of development.
International Application : Endorsed (approved) by IMF Board. Please see Guidelines for Foreign Exchange Reserve Management: Accompanying Document (http://www.imf.org/external/np/mae/ferm/2003/eng/index.htm).