Commodity-based Sovereign Wealth Funds: Managing Financial Flows in the Context of the Sovereign Balance Sheet

Abdullah Alhassan, Sue Brake, Michael Papaioannou and Martin Skancke

No 2018/026, IMF Working Papers from International Monetary Fund

Abstract: Commodity-based sovereign wealth funds (SWFs) have been at a crossroads following the recent fall in commodity prices. This paper provides a framework for commodity-based SWF management, focusing on stabilization and savings funds, by (i) examining macrofiscal linkages for SWFs; (ii) presenting an integrated sovereign asset and liability management (SALM) approach to SWF management; and (iii) applying this framework to a scenario where assets are being accumulated and to a scenario where the SWF is drawn on to cover a financing gap due to lower commodity prices.

Keywords: WP; asset; price; financial asset; liquidity; commodity; sovereign wealth funds; sovereign asset and liability management; financing gap; investment management; risk management; macroeconomic coordination; SWF assets; SWF management; investment strategy; asset accumulation; net asset position; SWF balance sheet; asset allocation perspective; negative carry; SWF inflow; SWF performance; SWF owner country; opportunity cost; Financial statements; Government debt management; Government asset and liability management; Global (search for similar items in EconPapers)
Pages: 35
Date: 2018-02-09
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Citations: View citations in EconPapers (1)

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