How to Set Up a Cash Buffer: A Practical Guide to Developing and Implementing a Cash Buffer Policy by Y. Hurcan, E. Balibek and F. Koçhttps published by IMF (1/2021)
This Note discusses the role of the cash buffer in managing cash balances and mitigating liquidity risk in cash and debt management. The paper offers practical approaches to developing a policy framework, considering the risk mitigation objectives and the cost of carrying the funds. It provides many examples of country practices as well as a set of policy and technical recommendations for setting up a cash buffer target.
How to Develop a Framework for the Investment of Temporary Government Cash Surpluses by I. Fainboim Yaker, S. Saxena and Mike Williams published by IMF (1/2021)
This Note discusses the policy framework and processes that governments should put in place to identify, guide, and govern the investment of their surplus cash resources. The paper discusses the various investment options, their attendant risks and procedural requirements, and challenges in managing cash assets. It also covers how governments should address the main institutional, governance, risk management, and coordination issues. The paper provides examples of how countries have established a framework for measuring and monitoring performance against their cash management objectives.
