International Reserves and Foreign Currency Liquidity: Guidelines for a Data Template

This book provides guidelines for the data template, which integrates the concepts of international reserves and foreign currency liquidity in a single framework. Information is given about the development of its underlying framework, and an outline of its structure and key features. The template was developed in 1999, by the IMF and a working group of the Committee on the Global Financial System of the Group of Ten central banks. It aims to provide a comprehensive account of countries' official foreign currency assets and resources. The template is a prescribed category of the IMF's Special Data Dissemination Standard, which was established in 1996.

International financial crises in the late 1990s revealed that deficiencies in countries' international reserves and related information made it difficult to anticipate and respond to crises by obscuring financial weaknesses and imbalances. This volume sets forth an innovative framework to assess countries' international reserves and foreign currency liquidity. The framework takes account of official balance-sheet and off-balance-sheet financial activities, future and potential demand for foreign exchange to meet official obligations, the availability of official foreign currency asserts to meet such demand, and official risk exposure to exchange rate fluctuations. This work clarifies what international reserves are, and how international reserves and related information should be strengthened to promote informed decision making in the public and private sectors, thereby helping improve the functioning of global financial markets.