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Posted on 9/23/2025
Global financial stability surveillance and lending
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Washington, DC, USA
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The IMF works to keep the world economy stable and support sustainable growth. It monitors global and national economies and gives policy advice to its 190 members to improve stability and living standards. When a country faces balance of payments problems, the IMF offers temporary financial assistance and exchange-rate support, and it serves as a forum for members to discuss economic issues. It also provides training and builds institutional capacity, backed by economic research and statistics, with the goal of promoting global monetary and financial stability and raising living standards worldwide.
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1945
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Japan urged to safeguard central bank independence. Former International Monetary Fund chief economist Kenneth Rogoff has urged Japan to respect central bank independence, warning against unwelcome rises in bond yields. At a March 26 economic council meeting, Rogoff advised Prime Minister Sanae Takaichi that an autonomous central bank is crucial for market trust, especially amidst rising global debt-funded spending. He cautioned long-term Japanese government bond (JGB) yields could escalate to 3% or higher, stressing independence is paramount when markets fear policies pushing up interest rates, as a perceived subordinate central bank can exacerbate yield increases. Rogoff also suggested establishing an independent institution for fiscal projections would bolster confidence. This comes as Prime Minister Takaichi, advocating loose fiscal and monetary policies, and her advisers have opposed the Bank of Japan's (BOJ) plans to raise interest rates. The BOJ, Japan's central bank responsible for monetary policy, has signalled readiness to hike rates soon, though political opposition and global conflicts could prompt delay. Takaichi's administration has introduced fuel subsidies and considers freezing an 8% sales tax on food for two years, measures expected to expand Japan's significant debt. The government also contemplates changes to fiscal goals, which critics say dilute deadlines for a primary balance surplus. Concerns over these expansionary fiscal policies and mounting inflationary pressures recently pushed the benchmark 10-year JGB yield to a 27-year high of 2.43%. Olivier Blanchard, professor emeritus at MIT, also advised against a temporary tax freeze, advocating structural reforms. He warned Japan's decreasing debt ratio, currently benefiting from low rates, is unsustainable. Blanchard highlighted that debt issued at very low rates is unlikely to persist as global neutral rates climb, advising Japan to aim for a zero primary balance within approximately five years.
Stress-Tested by war: modernizing IMF support in a volatile World. April 06, 2026 April 02, 2026 Last week, the IMF published a blog post with its first assessment of the economic fallout from the Iran war. The blog post carries immense institutional weight - co-authored by all the Fund's area department directors, the chief economist, and the heads of monetary/capital markets and fiscal affairs. Despite the heavy-hitting byline, the blog post leaves me with two overarching questions: First, is IMF surveillance agile and forward-looking enough to respond to today's economic shocks? It was welcome news that the IMF, the World Bank, and the International Energy Agency subsequently announced a joint "war room" to monitor the impacts and coordinate responses. But the reality is that the Fund's first public assessment came 30 days after the first missiles dropped, at a time when energy prices and uncertainty have soared and many of its members are feeling pressure. As this Atlantic Council piece clearly argues, the Iran war demonstrates the need for timelier IMF surveillance that is more responsive to today's challenges, including weaponized supply chains. The upcoming Comprehensive Surveillance Review should tackle these issues head on. Second, given the exceptional nature of this shock, what should the Fund do beyond regular business to support at-risk countries? Several emerging market and developing economies (EMDEs) are staring down the barrel of terms-of-trade shocks, higher fiscal deficits, and tightening financial conditions. In its blog post, the Fund offers up an uninspiring response: countries need better policies, and the IMF will support through policy advice, capacity development, and, where needed, financing. These points are all correct at a high level - but are also essentially the Fund's day-to-day mantra. How the IMF can step up support. This is not a typical shock, and the standard policy prescription falls short. Based on the last two major global shocks - the COVID-19 pandemic and Russia's war in Ukraine - we have hard-learned insights on exactly where and how the Fund can step in. Most immediately, the Fund can deploy emergency financing to meet urgent balance of payments needs. Countries that do not need - or cannot quickly negotiate - a full program can request the non-concessional Rapid Financing Instrument (RFI) and/or the concessional Rapid Credit Facility (RCF) for low-income countries. These are single-tranche disbursements that only require countries to meet basic safeguards (i.e., there is no ex-post conditionality). During COVID, the IMF raised access limits to these facilities, through which it provided financing to over 80 countries. In the aftermath of Russia's war, the IMF created a temporary Food Shock Window to provide additional lending space under these facilities - though only six countries, including Ukraine, accessed that window. The IMF likely does not need to further raise access limits to these facilities as in past shocks. Current available access appears sufficient to provide countries in need with some cushion as they negotiate new or adjust existing full-fledged IMF programs. Countries that accessed the non-concessional RFI during COVID have already paid it back. While many low-income countries are still repaying COVID-era concessional RCF loans - which have longer repayment periods than the RFI - they all maintain some borrowing space with higher approved limits already in place until 2027. Plus, most countries have not accessed the RFI or RCF within the last year, so the yearly access limit of 50 percent of quota will not be a constraint (with Sri Lanka, which accessed the RFI following Cyclone Ditwah in late 2025, being a notable exception). More broadly, this crisis should be a catalyst for IMF management and shareholders to rethink how the Fund supports vulnerable countries so that they can manage more frequent global shocks, while still advancing ambitious growth and reform agendas. The goal should be to help countries build buffers and resiliency, while not sacrificing near-term growth and development priorities. Unlike emergency financing, these responses will require more thought, political support, and calibration as the Iran war and spillovers evolve. Some examples of the IMF's policy responses and tools include: Moving to more growth-friendly program design. The IMF must work with current and future program countries to incorporate the new macroeconomic and financial reality post-Iran war. A key outcome of the IMF's "three-pillar approach" to help countries facing liquidity challenges is the recognition of the need for "sequencing [domestic] reforms to accelerate economic growth and create jobs." This mentality should inform the IMF's engagement with countries dealing with the shock of the Iran war. And the upcoming Review of Conditionality should integrate this concept - along with a more ambitious recognition of the need for EMDEs to invest in their economies - into how the Fund engages in program design. Debt relief. This crisis could provide the motivation for an international effort to draw a line under lingering debt problems in many EMDEs. During COVID, the IMF and the G20 rolled out the Debt Service Suspension Initiative (DSSI) available to all IDA-eligible countries, which transitioned into the case-by-case Common Framework for the countries in that group that needed further relief. The Common Framework is still notoriously slow though, despite some improvements over time. Even countries with acute liquidity challenges will avoid it at all costs, even if it means sacrificing social spending and investment to service high-cost debt. Given the well-known depth and breadth of debt vulnerabilities among EMDEs - combined with another global shock - the IMF, working with the World Bank, should be working on a broader debt initiative to help countries facing urgent liquidity constraints. This could involve a new, coordinated effort to: (1) amp up concessional financing, for example through repurposing the Resilience and Sustainability Trust, to support ambitious growth and investment programs and (2) develop a more systematic tool to refinance high-cost debt to free up fiscal space. This initiative would be in addition to ongoing efforts to improve the Common Framework for countries that need restructuring and implement shock-absorbing clauses in future debt contracts. Catastrophe containment and relief trust. The IMF can draw on past innovations to put internal resources toward sustainably replenishing this tool. The CCRT is a grant-based trust fund that provides IMF debt service relief for the poorest countries hit by a shock. During COVID, the CCRT provided nearly $1 billion in debt service relief to over 30 countries. IMF management and shareholders could reimagine the trust to help the poorest countries if they have an ambitious, growth-friendly reform program and are tackling their debt vulnerabilities. The CCRT is out of money, however, and now is not a great time to ask donors for big grant contributions. The IMF's internal resources could be a solution, specifically the precautionary balances account. As of October 2025, the IMF held over SDR 26 billion in precautionary balances, compared to the Board-mandated precautionary balances target level of SDR 25 billion and a minimum of SDR 20 billion. As part of a larger rethink of how to support vulnerable EMDEs, IMF management and shareholders should revisit the successful mechanism designed to replenish the Poverty Reduction and Growth Trust from precautionary balances, redirecting excess net income to replenishing the CCRT. Special drawing rights (SDR) allocation. While a powerful tool for the IMF, now is not the right moment to spend time or political capital on another SDR allocation. The IMF issued $650 billion in new SDRs following the COVID shock to boost liquidity across the board. However, a new allocation of SDRs is not an appropriate tool for the current shock, at least not at this juncture. COVID was a synchronized global demand shock that created a global demand for reserve assets, while the Iran war is asymmetric and centered so far on energy and commodities. Plus, the political feasibility of an SDR allocation in the United States (which has a veto over new allocations) is remote and would be a distraction from other IMF-related initiatives, like finalizing the 2024 quota increase and any of the other initiatives described above. Whether it's these initiatives or others, the IMF, the G20, and other key stakeholders should be working urgently on new ideas to help countries that have been feeling pressure after subsequent shocks, further heightened by the Iran war. Now is not the time to accept the status quo - the IMF can position countries to build more growth-friendly and resilient economic frameworks to withstand future shocks, which seem inevitable in the current geopolitical context. Disclaimer & permissions. CGD's publications reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions. You may use and disseminate CGD's publications under these conditions.
IMF blockchain tokenization warning: instant crisis threat. A new report from the International Monetary Fund has issued a stark IMF blockchain tokenization warning, cautioning that the rapid migration of traditional financial infrastructure to blockchain ledgers may be outpacing regulatory safeguards. As institutional giants race to digitize trillions of dollars in capital, the very efficiencies they champion could inadvertently lay the groundwork for an instant settlement market crisis. The 23-page IMF note, titled "Tokenized Finance" and released in early April 2026, marks a pivotal moment in the dialogue surrounding digital assets. While the fund acknowledges the benefits of moving securities to shared ledgers, it explicitly warns that the elimination of traditional financial buffers leaves the global economy highly vulnerable to automated, cascading market panics. Wall Street's race to digitize capital. The pace of Wall Street asset tokenization 2026 has shattered previous expectations. Financial institutions are aggressively converting rights to real estate, private credit, and equities into programmable tokens. This push is driving spectacular real-world asset RWA market growth, with on-chain tokenized assets surpassing $27.5 billion, excluding stablecoins, by the start of the second quarter. Leading the institutional charge is BlackRock. In his closely watched 2026 shareholder letter, CEO Larry Fink championed tokenization as a generational leap in financial technology, comparing its potential impact to the early days of the internet. Fink's vision targets a projected $20 trillion market by 2030, aimed at lowering the barrier to entry for everyday investors. The overwhelming success of the BlackRock tokenized stock pilot programs and the continuous expansion of its Ethereum-based BUIDL fund have provided traditional finance with undeniable proof-of-concept. Competitors across the banking sector are now rushing to build their own proprietary infrastructure, fearing they will be left behind in the transition to 24/7 capital markets. The hidden dangers of atomic speed. However, the International Monetary Fund argues that Wall Street's singular focus on operational efficiency ignores severe blockchain financial stability risks. Tobias Adrian, the IMF's Financial Counselor, emphasized that tokenization is not just a marginal technology upgrade; it represents a fundamental, structural shift in the global financial architecture. "Atomic settlement and enhanced transparency reduce some traditional risks, but speed and automation introduce new ones," the IMF report states. The loss of temporal buffers. The core of the IMF's concern lies in the death of delayed settlement. In traditional markets, the standard settlement window provides a vital safety net. These temporal buffers give financial institutions hours or days to manage liquidity during volatile events. More importantly, they provide central banks the critical reaction time needed to execute emergency interventions when systems threaten to break. When trades settle instantly via self-executing smart contracts, those safeguards vanish. An automated margin call triggered by a minor price discrepancy could execute mercilessly across international borders, resulting in a devastating downward spiral before human regulators even realize a crisis has begun. The fund cautions that a single bug in shared ledger code could disrupt entire global markets in minutes. Threats to Emerging markets. The risks extend far beyond Wall Street trading desks. For Emerging and Developing Economies, the widespread adoption of borderless tokenized assets presents an acute threat to monetary sovereignty. The IMF warns that the proliferation of dollar-denominated stablecoins acting as settlement layers could drastically accelerate currency substitution. Citizens in nations with weaker financial systems could bypass local fiat entirely, leading to massive, volatile capital flight. This dynamic strips local central banks of their ability to manage domestic economies through traditional monetary policy. Regulatory responses and market fragmentation. The borderless nature of blockchain technology directly conflicts with the territorial limits of modern financial regulators. When digital assets sit on decentralized ledgers bridging dozens of countries, determining jurisdictional authority during a cross-border failure becomes incredibly complex. Regulators in Washington are acutely aware of the changing market dynamics. Recent progress surrounding SEC tokenization regulation Paul Atkins signals that federal watchdogs are working to keep innovation safely within domestic borders. During recent congressional hearings, SEC Chair Atkins confirmed a fast-approaching timeline for a tokenization innovation exemption, designed to offer a structured compliance path for companies issuing digital twins of equities. Atkins outlined three main avenues for tokenized trading - direct issuance, on-chain entitlements, and synthetic exposures - acknowledging that economic reality must dictate oversight. Yet, the IMF insists that isolated national policies are fundamentally inadequate. If every jurisdiction or major bank builds isolated, non-interoperable permissioned blockchains, liquidity will become severely fragmented. Such silos reduce netting efficiency and make it significantly harder to offset transactions, increasing market friction rather than eliminating it. Balancing innovation with economic survival. The industry finds itself at a critical crossroads. The automation of finance undeniably promises lowered operational costs, round-the-clock trading, and broader access for retail participants. But if the underlying technology lacks robust public infrastructure, interoperability standards, and centralized circuit breakers, the system remains deeply fragile. Financial leaders must reconcile the friction they desperately want to eliminate with the protective guardrails they are unknowingly dismantling. For the tokenized economy to safely process trillions in capital, developers and policymakers need to collaborate immediately to program digital shock absorbers. Failing to do so could leave the global economy fully exposed to lightning-fast algorithmic panics that no central bank can outrun.
SunSirs: global central banks zero in on inflation risks as energy costs surge. 2026-03-30 16:25:01 Source: ChemNet Recently, the tense situation in the Middle East has driven up energy prices such as crude oil and natural gas. Olivier Blanchard, the former Chief Economist of the International Monetary Fund (IMF), said that there is a possibility that international crude oil prices could rise to $200 per barrel or even higher. At the same time, market concerns about a global slide into high inflation have been rekindled. Although the rise in global energy prices has not significantly pushed up the inflation levels of major countries at present, the uncertainties and risks associated with it have indeed increased. Faced with the potential upside risks of inflation, how the monetary policy paths of the world's major central banks will adjust, and what judgments policymakers will make on the current economic situation and inflation trends have all become the focus of market attention. This week's "Super Central Bank Week" is coming. Major global central banks, including the Federal Reserve, the Bank of Japan, the European Central Bank, the Bank of England and the Bank of Canada, will all hold monetary policy meetings. The market is expected to gain more insights into the shift in the tone of central bank policymakers and the possible adjustments to the path of future monetary policy from this "Super Central Bank Week". Among the central banks of numerous developed economies, the Federal Reserve is undoubtedly the focus of market attention. The term of Jerome Powell, the current Chair of the Federal Reserve, will end in May this year, and the Federal Reserve will witness a change of chairmanship, which has increased the uncertainty regarding the adjustment of the Federal Reserve's monetary policy to a certain extent. Now, inflation concerns are heating up, and the Federal Reserve's path to interest rate cuts may face further variables. The latest data shows that the U.S. Personal Consumption Expenditures (PCE) Price Index rose by 0.3% month-on-month and 2.8% year-on-year in January. The core PCE Price Index, which excludes food and energy prices, increased by 0.4% month-on-month and 3.1% year-on-year in January, with the year-on-year gain hitting its highest level since March 2024. Some analysts believe that U.S. inflation was already in a poor state before the geopolitical conflicts in the Middle East broke out, and now it will only become more intractable. Currently, the market has pushed back the timing of the Federal Reserve's first interest rate cut this year, expecting that the Fed will not cut rates at least before September. Barclays research team recently postponed its expectation for the Fed's first rate cut this year from June to September, and predicted that the Fed will only cut rates once this year, with a reduction of 25 basis points. As for the euro area, the European Central Bank (ECB) chose to "hold steady" at its monetary policy meeting in February. Data released by Eurostat on March 4 showed that, according to flash estimates, the euro area's Harmonized Index of Consumer Prices (HICP) rose by 1.9% year-on-year in February, up from 1.7% in January. Judging from the current situation, facing the potential rise in inflation triggered by the ongoing tensions in the Middle East, the ECB is expected to adopt a relatively cautious stance to observe the trend of inflation. In addition, if the geopolitical conflict leads to a continuous surge in energy prices in the euro area and causes inflation to get out of control, the possibility of the ECB resuming interest rate hikes cannot be ruled out. Compared with the central banks of other developed economies, the Bank of Japan has always firmly stayed on the path of interest rate hikes. However, regarding the pace of rate hikes, the Bank of Japan has maintained a relatively cautious attitude and has not taken big steps. At its monetary policy meeting in January this year, the Bank of Japan kept interest rates unchanged while leaving room for future rate hikes. The Bank of Japan said in January that it would continue to raise its policy rate if the economic and price developments align with its projections. Faced with the geopolitical conflict in the Middle East, Bank of Japan Governor Kazuo Ueda emphasized recently that the bank is closely monitoring the situation, particularly the potential significant impact of rising energy prices on Japan's economy. At the monetary policy meeting to be held this week, the Bank of Japan is expected to release more signals about inflation trends and the future path of monetary policy. Overall, against the backdrop of the current geopolitical conflicts in the Middle East, the upward inflationary pressure that may be triggered by rising energy prices will become the focus of attention of major central banks around the world. At the same time, the judgment on the trend of inflation will, to a certain extent, affect the monetary policy paths of major central banks. Brian Levitt, Chief Global Market Strategist at Invesco, analyzed that if the conflict leads to a long-term blockade of the Strait of Hormuz, or if the conflict escalates and substantially disrupts energy production in Gulf countries including Saudi Arabia and Qatar, oil and gas prices will continue to rise, the global economy may face pressure, and inflation may also be pushed up. It is worth noting that the impact of the geopolitical conflicts in the Middle East on the global energy market may only be short-term, and whether the monetary policies of the world's major central banks will undergo fundamental changes depends on how the situation in the Middle East evolves. If the tensions in the Middle East ease, the market's anxiety is expected to weaken until it returns to normal. The stable performance of inflation may also increase the possibility that policymakers of the world's major central banks will implement loose monetary policies. However, if the shipping in the Strait of Hormuz area continues to be blocked and global energy prices soar, interest rate hikes may become an option considered by more central banks to cope with the upward inflationary pressure. SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact [email protected] for subscription. [Copyright Notice] In the spirit of openness and inclusiveness of the Internet, ChemNet welcomes all media and institutions to reprint and quote its original content. If reprinted, please mark the source ChemNet. If you find any copyright issues with articles on this website, please contact Chemnet at [email protected]. Important information. Scan to access the mobile version View the latest and hottest chemical news content Commodity price chart. | Product name | Price (yuan/ton) | Price Limit | | Hydrochloric acid | 107.50 | +30.30% | | Diethylene glycol | 7000.00 | +27.27% | | Melamine | 9425.00 | +24.01% | | MEK | 14866.67 | +23.89% | | Acetic acid | 4140.00 | +20.23% | | Bromine | 69800.00 | +19.11% | | Propylene Glycol | 10333.33 | +16.98% | | Crude oil | 102.88 | +16.74% | | Propionic Acid | 6285.71 | +15.44% | | Sulfur | 5943.33 | +14.66% | | Sodium metabisulfite | 3016.67 | +14.56% | | Diethylene glycol | 5481.67 | +13.85% | | Methacrylate | 15575.00 | +12.86% | | Acetic anhydride | 6162.50 | +11.79% | | Hydrofluoric acid | 14666.67 | +11.39% | Commodity intelligence. * Butyl acetate 15:52 * Butyl acetate 15:51 * DMF 15:41 * DMF 15:40
ECOWAS and IMF sign cooperation deal to bolster West Africa's economic governance. March 29, 2026 The Economic Community of West African States (ECOWAS) and the International Monetary Fund (IMF) have signed a Memorandum of Understanding (MoU) to enhance macroeconomic governance and deepen regional integration across West Africa, with the agreement formalised on March 27, 2026 at the ECOWAS Commission headquarters in Abuja, Nigeria. ECOWAS Commission President Omar Alieu Touray signed on behalf of the regional bloc, while Wautabouna Ouattara, Executive Director of the IMF for West Africa, represented the Fund. The MoU establishes a structured framework to strengthen cooperation across macroeconomic governance, policy coordination, and regional economic integration. Ouattara described the agreement as going beyond symbolic significance, saying it introduces a practical and flexible cooperation framework built around joint analytical work, knowledge sharing, and enhanced policy coordination. He added that it would strengthen policy coherence, support evidence-based decision-making, and amplify West Africa's collective voice in global economic governance. Touray stressed the deal's importance in pushing forward the long-delayed ECOWAS Monetary Union agenda, an ambition that has faced repeated setbacks, while also reinforcing regional surveillance mechanisms. The partnership is expected to deliver stronger economic governance frameworks, improved resilience to external shocks, and more inclusive and sustainable growth across ECOWAS member states. The signing comes as several ECOWAS member states face mounting fiscal pressures, rising debt levels, and currency pressures, raising questions about how effectively the new framework will translate into tangible economic outcomes on the ground. Send your news stories to [email protected] Follow News Ghana on Google News