Joint MEFMI_ICD Course on Exchange Rate Policy

MEFMI/IMF-ICD Course on Exchange Rate Policy Analysis Offered for the First Time in Africa

MEFMI collaborated with the IMF Institute for Capacity Development to offer, for the first time in Africa, a course on Exchange Rate Policy Analysis. The course was attended by 26 participants from 9 MEFMI member countries from September 10-21, 2018 in Kampala, Uganda. Ms. Mary Katarikawe, Executive Director Operations, Bank of Uganda, opened the course while Dr. Sehliselo Mpofu, Director, Macroeconomic Management Programme, MEFMI welcomed participants to the course.

The first part of the workshop introduced key definitions and concepts used in exchange rate analysis; discussed how changes in the real exchange rate may affect external adjustment and growth; and presented methodologies to estimate the equilibrium real exchange rate. The workshop also explained the IMF external balance assessment (EBA) approach to measure the degree of real exchange rate misalignment. Several aspects of related to foreign exchange (FX) intervention were also covered.

The second part of the workshop covered macroeconomic policy tradeoffs related to different exchange rate regimes, the choice of exchange rate regimes, and the main exchange rate policy challenges in developing and emerging market economies, such as the use of hybrid regimes, forced and unforced exits from pegs, and the reasons behind “fear-of-floating.” The workshop concluded with a discussion of currency crises, macroeconomic policies to prevent them, and the analytical tools used to anticipate them. In addition, Dr. Mpofu gave an overview presentation on MEFMI’s work on gender equality mainstreaming of economic policy management, and gender and exchange rate policy analysis, in particular.

The course overall ratings of 4.8 out of 5.0 suggests that it was well received. Lecture-by-lecture and workshop-by-workshop evaluations were also consistent with the overall course rating. Participants appreciated the breadth and depth of the course, as well as the regionalization. The learning gain amounted to about 23 percent, with the average increasing from 39.8 percent of correct answers to 62.8 percent in the post-course test.

Various discussions with participants suggested that they appreciated the choice of topics and the engagement of lectures and counselors. In addition, they enjoyed the group projects, during which they applied the tools they had learned (including 3 EBA-lite methods, 3 reserve adequacy measures, exchange market pressure indices, coordination of exchange rate policy with other economic policies) to the case of Uganda, Malawi, and Kenya.

The course was delivered by the IMF- ICD team comprising of Mr. Norbet Funke, Anna Unigovskaya and Ray Brooks.