Data Template on Foreign Currency Liquidity

Data Template on Foreign Currency Liquidity
AVAILABLE SINCE AUGUST 2003

Indicate the format you want and choose year and month.

You can access the complete methodology used to design the Data Template on Foreign Currency Liquidity here: http://www.imf.org/external/np/sta/ir/index.htm (link to the IMF website)

Purpose of the disclosure of this information , and structure of the data

In the last years, international financial crises have highlighted the need of counting with updated data and a higher level of analysis regarding the foreign currency liquidity of the Central Government-Central Bank consolidate.

The globalization of financial markets and financial innovations have further increased the amount and complexity of the information required.

The dissemination of such data serves various purposes, namely:

The enhancement of economic agents’ knowledge of the risk involved in economic policy decisions.
It may encourage a faster correction of unsustainable policies and perhaps restrain the contagion effect in the event of financial turbulence.
Capital market participants shall have a more accurate view of the situation of individual countries and the vulnerability of regions, with the international implications thereof, thus reducing uncertainty and volatility in financial markets.

As it mainly consists in an analysis of foreign currency liquidity, it should be emphasized that this is a broader concept than that of net international reserves, for two basic reasons:

In the case of net international reserves, external assets and liabilities are taken into consideration, while foreign currency liquidity includes foreign currency liquid assets and liabilities, regardless of whether they are on residents or non-residents.
When considering the Central Government-Central Bank consolidate, foreign currency liquid assets and liabilities held by the Central Government are also recorded.

The Data Template on Foreign Currency Liquidity has a four-section structure, as follows:

Official reserve assets and other foreign currency assets

In this section, foreign currency liquid assets of the Central Government-Central Bank consolidate are reported at a given date, regardless of whether they are on residents or non-residents. These assets are valued at market price.

II. Predetermined short-term net drains on foreign currency

Both in this section and in the following one, data are reported for a 12 month horizon, subdivided in three tranches: up to 1 month, more than 1 month and up to 3 months, and more than 3 months and up to 1 year.

Foreign currency outflows and inflows from contractual obligations or rights of the authorities (Central Government-Central Bank) shall be reported in section II. Said obligations and rights may be either with residents or non-residents and may derive or not from activities included in the balance sheet. They must be recorded in nominal values.

With respect to inflows, only those related to foreign currency assets held by the authorities must be reported, provided that the same have not been included in section I. On account of the above, in no case shall disbursements on agreed loans be recorded in this section, regardless of the fact that such loans are subject or not to any conditionality. Agreements with IMF implying that the country shall receive financial assistance must be reported as footnotes.

Public debt service payments by the Central Government-Banco Central consolidate are included in foreign currency outflows, as well as foreign currency deposits of resident and nonresident entities with the Central Bank. However, the foreign currency deposits held at the monetary authorities by commercial banks in respect of the regulatory reserves/liquidity requirements should be included in Section III.

Forward, swaps and future contracts are included in the off-balance-sheet activities but they give rise to predetermined flows in foreign currency; thus, they must be recorded in this section.

Contingent short-term net drains on foreign currency

Contingent inflows and outflows derive from contractual rights and obligations that may originate potential foreign exchange inflows or outflows. The difference between this section and the previous one is that foreign currency flows to be reported in this section depend on exogenous events. As in the previous section, contingent flows may result from positions with residents and non-residents. Undrawn unconditional credit lines shall be included in this section; the same shall be readily available to economic authorities and shall not be subject to any material conditionality. Also should be included in this section the foreign currency deposits held at the monetary authorities by commercial banks in respect of the regulatory reserves/liquidity requirements

IV. Memo Items

This section shall include the following information:

Flows not reported in sections I-III that are deemed relevant by authorities to assess the level of reserves.

Some details related to flows reported in sections I-III.

Those situations in which the flows reported in sections I-III have not been valued according to the established criteria.

The domestic currency debt indexed to foreign exchange rates and the composition of reserves by currency groups, shall be reported, inter alia, in this section.

Full guidelines for the preparation of the Data Template on Foreign Currency Liquidity are available at: http://www.imf.org/external/np/sta/ir/index.htm