ABSTRACT
Trade policy formation is frequently undesirably isolated from financial and exchange rate policy discussions. Responsibility for exchange rate policy at the international level resides with the International Monetary Fund (IMF). A need for strict confidentiality in policy discussions between the IMF and individual national monetary authorities has had negative implications particularly insofar as the World Bank is concerned. Despite the critical importance of exchange rate policy as a tool of development policy at the global level, the Bank has never undertaken analytical work on the issue. This limited involvement of the Bank in exchange rate issues at the individual country level has been unfortunate both in terms of the Bank’s country and sector analytical work and in terms of its operational activities. As regards developed country attitudes, these are likely to be dominated by the issue of the “robustness” of the influence exercised by the IMF and the Bank on critical policy issues in the developing world.
