IMF Working Papers

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

By Abdullah Alhassan, Sue Brake, Michael G. Papaioannou, Martin Skancke

February 9, 2018

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Abdullah Alhassan, Sue Brake, Michael G. Papaioannou, and Martin Skancke. Commodity-based Sovereign Wealth Funds: Managing Financial Flows in the Context of the Sovereign Balance Sheet, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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.

Subject: Budget planning and preparation, Financial statements, Fiscal policy, Government asset and liability management, Government debt management, Public debt, Public financial management (PFM)

Keywords: Asset, Asset accumulation, Asset allocation perspective, Commodity, Financial asset, Financial statements, Financing gap, Global, Government asset and liability management, Government debt management, Investment management, Investment strategy, Liquidity, Macroeconomic coordination, Negative carry, Net asset position, Opportunity cost, Price, Risk management, Sovereign asset and liability management, Sovereign wealth funds, SWF assets, SWF balance sheet, SWF inflow, SWF management, SWF owner country, SWF performance, WP

Publication Details

  • Pages:

    35

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/026

  • Stock No:

    WPIEA2018026

  • ISBN:

    9781484340967

  • ISSN:

    1018-5941