Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Front Matter

Front Matter

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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    © 2007 International Monetary Fund

    Library of Congress Cataloging-in-Publication Data

    International Monetary Fund.

    Annual Report on exchange arrangements and exchange restrictions [electronic resources]. 1979—

    Continues: International Monetary Fund. Annual Report on exchange restrictions, 1950–1978

    1. Foreign exchange—Law and Legislation—Periodicals. 2. Foreign exchange administration—Periodicals. 1. Title K4440.A13 157 2007 341.7’ 5179-644506

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    Letter of Transmittal to Members and Governors of the Fund

    October 12, 2007

    Dear Sir or Madam:

    I have the honor of transmitting to you a copy of the International Monetary Fund’s Annual Report on Exchange Arrangements and Exchange Restrictions, 2007, which has been prepared in accordance with the provisions of Article XIV, Section 3 of the Articles of Agreement.

    On behalf of the Executive Board, I would like to express our appreciation to the countries for their cooperation in the preparation of the Report.

    Sincerely yours,

    Rodrigo de Rato

    Chairman of the Executive Board and Managing Director

    Contents

    Note: The term “country,” as used in this publication, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states but for which statistical data are maintained and provided internationally on a separate and independent basis.

    PREFACE

    The Annual Report on Exchange Arrangements and Exchange Restrictions has been published by the IMF since 1950. It draws on information available to the IMF from a number of sources, including that provided in the course of official staff visits to member countries, and has been prepared in close consultation with national authorities. The information is presented in a tabular format.

    This project was coordinated in the Monetary and Capital Markets Department by a staff team directed by Karl F. Habermeier and comprising Judit Vadasz, Annamaria Kokeny, Jahanara Zaman, and Maria Zenaida M. de Mesa. It draws on the specialized contribution of that department (for specific countries), with assistance from staff members of the IMF’s five area departments, together with staff of other departments. The report was edited by Linda Griffin Kean of the External Relations Department and produced by Mrs. de Mesa and the IMF Multimedia Services Division.

    ABBREVIATIONS

    ACP

    Atlantic, Caribbean, and Pacific countries

    ACU

    Asian Clearing Union (integrated by Bangladesh, Bhutan, India, Islamic Republic of Iran, Myanmar, Nepal, Pakistan, and Sri Lanka)

    AD

    Authorized dealer

    AEC

    African Economic Community

    AFTA

    ASEAN free trade area (see ASEAN, below)

    AGOA

    African Growth and Opportunity Act (United States)

    AMU

    Asian monetary unit

    ANZCERTA

    Australia-New Zealand Closer Economic Relations and Trade Agreement

    APEC

    Asia Pacific Economic Cooperation

    ASEAN

    Association of Southeast Asian Nations (integrated by Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand)

    ATC

    Agreement on Textiles and Clothing

    BCEAO

    Central Bank of West African States; the West African states are Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo

    BEAC

    Bank of Central African States; the Central African states are Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon

    CACM

    Central American Common Market (integrated by Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua)

    CAEMC

    Central African Economic and Monetary Community (integrated by the members of the BEAC)

    CAP

    Common agricultural policy (of the EU)

    CARICOM

    Caribbean Community and Common Market (integrated by Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, and Trinidad and Tobago). The Bahamas is also a member of CARICOM, but it does not participate in the Common Market.

    CB

    Central bank

    CEEAC

    Economic Community of Central African States (integrated by Angola, Burundi, Cameroon, Central African Republic, Chad, Democratic Republic of the Congo, Republic of Congo, Equatorial Guinea, Gabon, Rwanda, and São Tomé and Príncipe)

    CEFTA

    Central European Free Trade Area (integrated by Bulgaria, Hungary, Poland, Romania, Slovak Republic, and Slovenia)

    CEPGL

    Economic Community of the Great Lakes Countries (integrated by Burundi, Democratic Republic of the Congo, and Rwanda)

    CEPT

    Common effective preferential tariff of the AFTA

    CET

    Common external tariff

    CFA

    Communauté financière d’Afrique (administered by the BCEAO) and Coopération financière en Afrique centrale (administered by the BEAC)

    CIMA

    CIMA Code of Ethics for Professional Accountants

    CIS

    Commonwealth of Independent States (integrated by Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Russian Federation, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan)

    CITES

    Convention on International Trade in Endangered Species of Wild Fauna and Flora

    CLS

    Continued Linked Settlement (integrated by Denmark, Norway, and Sweden)

    CMA

    Common Monetary Area (a single exchange control territory comprising Lesotho, Namibia, South Africa, and Swaziland)

    CMCF

    Caribbean Multilateral Clearing Facility

    CMEA

    Council for Mutual Economic Assistance (dissolved; formerly integrated by Bulgaria, Cuba, Czechoslovakia, Hungary, Mongolia, Poland, Romania, the U.S.S.R., and Vietnam)

    COMESA

    Common Market for Eastern and Southern Africa (integrated by Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, and Zimbabwe)

    CPZ

    Commercial processing zone

    EAC

    East African Community

    EBRD

    European Bank for Reconstruction and Development

    ECB

    European Central Bank

    ECC

    European Community Council

    ECCB

    Eastern Caribbean Central Bank (Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines)

    ECCU

    Eastern Caribbean Currency Union

    ECOWAS

    Economic Community of West African States (integrated by Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo)

    ECSC

    European Coal and Steel Community

    EEA

    European economic area

    EFTA

    European Free Trade Association (integrated by Iceland, Liechtenstein, Norway, and Switzerland)

    EIB

    European Investment Bank

    EMU

    European Economic and Monetary Union (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia, and Spain)

    EPZ

    Export processing zone

    ERM

    Exchange rate mechanism (of the European monetary system)

    EU

    European Union (formerly European Community; integrated by Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, the United Kingdom, and, effective May 1, 2004, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic, and Slovenia)

    FATF

    Financial Action Task Force on Money Laundering (of the OECD)

    FII

    Foreign institutional investor

    GAFTA

    Greater Arab Free Trade Agreement

    GCC

    Gulf Cooperation Council (Cooperation Council for the Arab States of the Gulf; integrated by the Kingdom of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates)

    GSP

    Generalized system of preferences

    IBRD

    International Bank for Reconstruction and Development (World Bank)

    IDB

    Inter-American Development Bank

    IMF

    International Monetary Fund

    IOSCO

    International Organization of Securities Commissions

    LAIA

    Latin American Integration Association (integrated by Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, and República Bolivariana de Venezuela)

    LC

    Letter of credit

    LIBID

    London interbank bid rate

    LIBOR

    London interbank offered rate

    MERCOSUR

    Southern Cone Common Market (integrated by Argentina, Brazil, Paraguay, and Uruguay)

    MFA

    Multifiber Arrangement

    MFN

    Most-favored nation

    MOF

    Ministry of Finance

    NAFA

    North American Framework Agreement (integrated by Canada, Mexico, and the United States)

    NAFTA

    North American Free Trade Agreement

    OECD

    Organization for Economic Cooperation and Development

    OECS

    Organization of Eastern Caribbean States (integrated by Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines)

    OGL

    Open general license

    PACER

    Pacific Agreement on Closer Economic Relations (of the Pacific Islands Forum; integrated by Australia, Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu)

    PARTA

    Pacific Regional Trade Agreement (of the Pacific Islands Forum)

    PICTA

    Pacific Island Countries Trade Agreement (of the Pacific Islands Forum; integrated by Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu)

    RCPSFM

    Regional Council on Public Savings and Financial Markets (an institution of WAEMU countries that is involved in the authorization for issuance and marketing of securities)

    RIFF

    Regional Integration Facilitation Forum (formerly the Cross-Border Initiative; integrated by Burundi, Comoros, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe)

    SACU

    Southern African Customs Union (integrated by Botswana, Lesotho, Namibia, South Africa, and Swaziland)

    SADC

    Southern Africa Development Community (integrated by Angola, Botswana, Democratic Republic of the Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe)

    SCP

    Scandinavian Cash Pool (integrated by Denmark, Norway, and Sweden)

    SDR

    Special drawing right

    SPARTECA

    South Pacific Regional Trade and Economic Cooperation Agreement (signed by Australia, Cook Islands, Fiji, Kiribati, Marshall Islands, Federated States of Micronesia, Nauru, New Zealand, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu)

    UCAC

    Central African Units of Accounts

    UCITS

    Undertakings for the Collective Investment of Transferable Securities

    UDEAC

    Central African Customs and Economic Union (integrated by Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon)

    UN

    United Nations

    UNITA

    National Union for the Total Independence of Angola

    VAT

    Value-added tax

    WAEMU

    West African Economic and Monetary Union (formerly WAMU; integrated by the members of the BCEAO)

    WAMA

    West African Monetary Agency (formerly WACH)

    WAMZ

    West African Monetary Zone

    W-ERM II

    Exchange rate mechanism (of the WAMZ)

    WTO

    World Trade Organization

    Note: This list does not include abbreviations of purely national institutions mentioned in the country chapters.

    INTRODUCTION

    This volume (the fifty-eighth edition) of the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER) provides a description of the foreign exchange arrangements, exchange and trade restrictions, and relevant prudential measures of individual IMF member countries.1 Publication of the AREAER is based on Article XIV, Section 3, of the IMF’s Articles of Agreement, which mandates annual reports on the restrictions in force, as well as on the Review of the 1977 Surveillance Decision that requires IMF staff to review “(a) the introduction, substantial intensification, or prolonged maintenance, for balance of payments purposes, of restrictions on, or incentives for, current transactions or payments, or (b) the introduction or substantial modification for balance of payments purposes of restrictions on, or incentives for, the inflow or outflow of capital.”

    The 2007 edition attempts to provide a full and complete description of exchange and trade systems, going beyond exchange restrictions or exchange controls. To this end, a few changes have been made to the structure and content of the report in order to provide a more accurate and up-to-date description of the regulatory framework for current and capital account transactions.2 In general, the descriptions relate to exchange and trade systems as of end-2006, but in some cases reference is made to significant developments that occurred through mid-July 2007. As in the 2006 AREAER, this year’s report provides information related to restrictions on current international payments and transfers and multiple currency practices (MCPs), other than those imposed solely for international security considerations.3 This information consists of verbatim quotes from the latest IMF staff reports issued as of December 31, 2006, and represents the views of IMF staff, which may not necessarily have been endorsed by the IMF Executive Board.4

    The report also includes a De Facto Classification of Exchange Rate Regimes and Monetary Policy Framework (Table 5). The classification is based on the information available on members’ de facto arrangements, as analyzed by IMF staff, which may differ from countries’ officially announced arrangements. The table on Summary Features of Exchange Arrangements and Regulatory Frameworks for Current and Capital Transactions in Member Countries (which appears at the end of this Introduction) provides an overview of the characteristics of the exchange and trade systems of IMF member countries. The Country Table Matrix (which comprises the Appendix) provides a complete listing of the categories used in the database, and the Compilation Guide (which follows this Introduction) includes definitions and explanations for the consistent application and interpretation of the categories.

    Table 1.Changes in Exchange Arrangements, 2006–2007

    (In percent of member countries)1

    End-April 2006End-April 2007
    Exchange arrangement with no separate legal tender21.95.3
    Currency board arrangement3.76.9
    Other conventional fixed peg arrangements26.237.2
    Against a single currency23.533.5
    Against a composite2.73.7
    Pegged exchange rate within horizontal bands3.22.7
    Crawling peg2.73.2
    Crawling band0.00.5
    Managed floating with no predetermined path for the exchange rate28.325.5
    Independently floating13.918.6
    100.0100.0

    Includes Aruba, Hong Kong SAR, and the Netherlands Antilles along with the 185 IMF members.

    Table 2.Changes in Exchange Arrangements, 2006–June 20071
    ChangesType of Change
    ArgentinaThe exchange rate structure became dual in 2006 as a result of an exchange measure that applied different exchange rates for the surrender of certain foreign exchange proceeds. The measure was meanwhile eliminated.Tightening of controls
    AzerbaijanThe old banknotes are out of circulation from the beginning of 2007.Neutral/institutional change
    The BahamasCommercial banks’ open spot or forward positions may not exceed 10% of the respective bank’s capital base instead of the previous limit of B$500,000.Neutral/institutional change
    BrazilBanks are permitted to trade on a forward basis. Such transactions must be settled within 750 days instead of 360 days as it was previously.Neutral/institutional change
    BurundiEffective July 5, 2006, the exchange rate structure was reclassified to multiple, because the exchange rates at the auction, the official exchange rate, and the market exchange rate may differ by more than 2%. The deviation of the auction rates was meanwhile eliminated.Tightening of controls
    ChinaEffective October 20, 2006, any foreign exchange transaction that is eligible for spot settlement under the regulations became eligible for forward settlement.Easing of controls
    ColombiaEffective May 7, 2007, the overall gross exposure of each participant in the derivative foreign exchange market may not exceed 500% of their total capital.Tightening of controls
    IndiaOutstanding forward contracts of importers and exporters booked on the basis of past performance must not exceed at any point in time 100% of the eligible limit, and any amount in excess of 50% of the eligible limit (effective December 13, 2006; previously, 25%) must be deliverable.Easing of controls
    IndiaEffective December 13, 2006, ADs are allowed to provide forward cover to hedge the economic exposure of importers in the customs duty payable on imports.Easing of controls
    IndiaEffective February 8, 2007, ADs may allow foreign institutional investors (FIIs) to cancel and rebook forward contracts up to 2% of the market value of their entire investment in equity and/or debt in India.Easing of controls
    LebanonForward operations for the accounts of clients are allowed, provided a minimum margin deposit of 20% is made by the client for each speculative operation.Tightening of controls
    MalawiEffective August 16, 2006, the exchange rate structure of Malawi was reclassified to dual because there is a significant spread between the commercial banks’ exchange rate and the rates at foreign exchange bureaus.Tightening of controls
    MalaysiaEffective April 1, 2007, hedging is allowed for any committed capital inflows or outflows such as drawdown or repayment of permitted foreign currency credit facilities and payment for permitted investment in foreign currency assets. Previously, hedging of foreign currency loan repayments was allowed only up to 24-month commitments.Easing of controls
    MalaysiaEffective April 1, 2007, licensed onshore banks may appoint overseas branches of their banking group as vehicles to facilitate the settlement of any ringgit assets of their nonresident clients.Easing of controls
    PeruBecause the Central Reserve Bank of Peru used bonds indexed to the exchange rate and denominated in local currency as an instrument to cover forward sales of dollars (CDRs) to deal with unusual volatility in the spot exchange rate associated with pressures arising from the sale of dollars in the futures market, as of December 31, 2006, no CDRs remained outstanding.Neutral/institutional change
    São Tomé and PríncipeEffective December 29, 2006, the exchange rate structure was reclassified to dual because the exchange rate applied by the commercial banks may differ by more than 2% from the Banco Central de São Tomé and Príncipe reference rate in between auctions.Tightening of controls
    SloveniaEffective January 1, 2007, the currency of Slovenia is the euro (previously, the Slovenian tolar).Neutral/institutional change
    Sri LankaForward sales and purchases of foreign exchange by ADs are permitted up to a period of 360 days in payments and receipts in foreign exchange for trade in goods and services instead of the prior rule of 720 days.Tightening of controls
    Syrian Arab RepublicGiven the reduction in the number of exchange rates, the arrangement has been reclassified from multiple to dual exchange rate.Easing of controls
    UkraineOn January 1, 2007, the fee on purchases of non-cash foreign exchange used for government pension insurance was reduced to 1%.Easing of controls
    VietnamIn 2007, option transactions with negotiated fees were introduced as a pilot.Easing of controls

    Changes not directly linked to the easing or tightening of rules are recorded as neutral changes. These are considered mainly to allow the setting up or development of instruments, institutions, and markets.

    Table 3.Types of Exchange Restrictions, 2006 1
    Member under
    Article XIV StatusArticle VIII StatusTotal
    Total number of restrictions maintained by members424284
    Restrictions on payments for invisibles and other current transfers:272350
    Foreign exchange budgets246
    Limited foreign exchange allowances for:17724
    Education213
    Medical expenses213
    Remittances437
    Travel415
    Other transfers538
    Freezing of foreign exchange deposits or inconvertibility of other deposits for current payments336
    Tax clearance certification235
    Other restrictions347
    Restrictions on payments for imports415
    Advance import deposits11
    Prior import payment requirements415
    Restrictions arising from bilateral or regional payment, clearing, or barter arrangements134
    Restrictions evidenced by external payment arrears156
    Arrears to commercial creditors112
    Arrears to official creditors11
    Arrears not specified44
    Multiple currency practices4816
    Memorandum items:
    Average number of restrictions per member3.51.92.4
    Number of countries with restrictions122234
    Sources: AREAER database; and IMF staff reports.

    Countries include IMF members plus Aruba, the Netherlands Antilles, and Hong Kong SAR. However, I. R. of Afghanistan, Iraq, and Somalia are excluded, because recent and comprehensive information on restrictions in these countries is not available. The data do not include security-related exchange restrictions.

    Table 4:Changes in the Provisions Specific to Financial Sector, 2006-Mid-July 2007
    Provisions Specific to

    Financial Sector
    Type of Controls
    PrudentialCapital
    EasingTighteningNeutralEasingTighteningNeutral
    Commercial banks and other credit institutions263221575
    Institutional investors60141110
    Table 5.De Facto Classification of Exchange Rate Regimes and Monetary Policy Framework, End-April 20071
    Exchange

    Rate Regime

    (Number of

    countries)
    Monetary Policy Framework
    Exchange rate anchorMonetary aggregate targetInflation targeting frameworkIMF-supported or other monetary programOther2
    Exchange arrangements with no separate legal tender (10)Another currency as legal tender
    Ecuador

    El Salvador3

    Kiribati

    Marshall Islands

    Micronesia, Fed. States of
    Montenegro, Rep. of

    Palau

    Panama

    San Marino

    Timor-Leste, Dem. Rep. of
    Currency board arrangements (13)Bosnia and Herzegovina

    Brunei Darussalam

    Bulgaria

    Hong Kong SAR

    Djibouti

    Estonia4

    Lithuania4
    ECCU (6)

    Antigua and Barbuda

    Dominica

    Grenada*

    St. Kitts and Nevis

    St. Lucia St. Vincent and the Grenadines
    Other conventional fixed peg arrangements (70)Against a single currency (49)
    Angola5

    Argentina5

    Aruba

    Bahamas, The7

    Bahrain, Kingdom of

    Barbados

    Belarus5

    Belize

    Bhutan

    Bolivia5,8

    Cape Verde

    Comoros9

    Egypt5

    Eritrea

    Ethiopia5

    Guyana*5,6

    Honduras†5

    Jordan5

    Kuwait5

    Latvia4

    Lebanon5

    Lesotho

    Macedonia, FYR*5

    Maldives

    Malta4

    Mauritania*5
    Mongolia5

    Namibia

    Nepal*

    Netherlands Antilles

    Nigeria5,12,7

    Oman

    Pakistan†5

    Qatar

    Rwanda*

    Saudi Arabia

    Solomon Islands5

    Suriname5, 7

    Swaziland

    Syrian Arab Rep.7

    Trinidad and Tobago5

    Turkmenistan5

    Ukraine5

    United Arab Emirates

    Uzbekistan5

    Venezuela, Rep. Bolivariana de7

    Vietnam5

    Yemen, Rep. of5

    Zimbabwe7
    Guyana*5,6

    Suriname5,6,7
    Pakistan†5
    CFA franc zone (14)
    WAEMU

    Benin*

    Burkina

    Faso*

    Côte d’Ivoire

    Guinea-Bissau

    Mali*

    Niger*

    Senegal

    Togo
    CAEMC

    Cameroon*

    Central

    African

    Rep.*

    Chad*

    Congo, Rep.

    of*

    Equatorial Guinea

    Gabon
    Against a composite (7)
    Fiji

    Libyan Arab Jamahiriya

    Morocco
    Samoa

    Vanuatu

    Iran, I.R. of5 Seychelles
    Pegged exchange rates within horizontal bands (5)10Within a cooperative arrangement (3)

    Cyprus4

    Denmark4

    Slovak Rep.†4
    Other band arrangements (2)

    Hungary†

    Tonga
    Hungary†

    Slovak Rep.†4
    Crawling pegs(6)Azerbaijan5

    Botswana

    China†5

    Iraq*5

    Nicaragua

    Sierra Leone*5
    China†5
    Crawling bands (1)Costa Rica
    Managed floating with no predetermined path for the exchange rate (48)Bangladesh

    Guinea5,7

    Haiti*5

    Jamaica5

    Lao P.D.R.

    Madagascar*5

    Malawi*7

    Mauritius

    Moldova*

    Mozambique*5

    Sri Lanka5

    Tajikistan

    Tanzania5

    Tunisia

    Uganda

    Uruguay5

    Zambia*5
    Colombia

    Czech Rep.

    Ghana

    Guatemala5

    Indonesia

    Peru*



    Romania

    Serbia, Rep. of

    Thailand
    Afghanistan,

    I.R. of*

    Armenia*5

    Dominican Rep.*5

    Gambia, The5

    Georgia*

    Kenya*

    Kyrgyz Rep.*









    Algeria

    Burundi*7

    Cambodia

    Croatia

    India

    Kazakhstan5

    Liberia5

    Malaysia

    Myanmar5,7

    Papua New

    Guinea5

    Paraguay*

    Russian

    Federation

    São Tomé and Príncipe*7

    Singapore

    Sudan
    Independently floating (35)Albania*

    Congo, Dem.

    Rep. of
    Australia

    Brazil

    Canada

    Chile

    Iceland

    Israel

    Korea

    Mexico

    New Zealand

    Norway

    Philippines

    Poland

    South Africa

    Sweden

    Turkey*

    United Kingdom
    Japan

    Somalia7,11

    Switzerland United States

    Euro area

    Austria

    Belgium

    Finland

    France

    Germany

    Greece

    Ireland

    Italy

    Luxembourg

    Netherlands

    Portugal

    Slovenia

    Spain
    Sources: IMF staff reports; IMF Recent Economic Developments; and IMF staff estimates

    An asterisk (*) indicates that the country has an IMF-supported or other monetary program. A dagger (†) indicates that the country adopts more than one nominal anchor in conducting monetary policy (it should be noted, however, that it would not be possible, for practical reasons, to include in this table which nominal anchor plays the principal role in conducting monetary policy).

    Includes countries that have no explicitly stated nominal anchor, but rather monitor various indicators in conducting monetary policy.

    The printing of new colones, the domestic currency, is prohibited, but the existing stock of colones will continue to circulate along with the U.S. dollar as legal tender until all colón notes wear out physically.

    The member participates in the ERM II.

    The regime operating de facto in the country is different from its de jure regime.

    There is no evidence of direct intervention by the authorities in the foreign exchange market.

    The member maintains an exchange arrangement involving more than one foreign exchange market. The arrangement shown is that maintained in the major market.

    This is a de facto classification resulting from the methodology described in Appendix II of this document. The Bolivian authorities consider their regime as a crawling peg and have not committed to the current level of the exchange rate.

    Comoros has the same arrangement with the French Treasury as the CFA franc zone countries.

    The bands for these countries are as follows: Cyprus ±15%, Denmark ±2.25%, Hungary ±15%, Slovak Republic ±15%, and Tonga ±5%.

    Insufficient information on the country is available to confirm this classification, and so the classification of the last official consultation is used.

    This classification is based on the exchange rate performance up to end-April 2007. The authorities have indicated that their current policy is to pursue a managed float.

    I. OVERALL DEVELOPMENTS

    This report documents a continuing trend toward liberalization of controls on current and capital account transactions during 2006 and until mid-July 2007 and toward a strengthening of prudential rules. In general, few countries introduced new controls or limitations on foreign exchange transactions during this period. The major trends and significant overall developments highlighted in this report are the following:

    • One country became an IMF member and notified the IMF of its acceptance of the obligations of Article VIII, Sections 2, 3, and 4, of the IMF’s Articles of Agreement, bringing the number of IMF member countries to 185 and the number of countries covered by this report accepting these obligations to 166.

    • Following the trend observed in previous years, exchange rate arrangements continued to become less flexible, with an increase in arrangements such as conventional pegs or crawling pegs. A number of countries used interventions to control appreciation pressures on exchange rates stemming primarily from foreign exchange inflows.5 As a result, excluding changes in methodology, the number of independent and managed floats declined by end-April 2007 compared with end-April 2006, respectively, by four and eight countries. The change in the approach to monetary unions, as explained below, resulted in a structural break in the data. A backward revision of the database using the new definition is being implemented.

    • Other changes in exchange arrangements not related to exchange rate regimes (such as rules for the operation of markets or taxes levied on exchange transactions) moved generally in the direction of liberalization, by simplifying the exchange rate structure and developing forward exchange markets.

    • The number of exchange restrictions, other than those imposed solely for security reasons, continued to decline, with an increase in the number of countries that do not maintain any exchange restrictions or MCPs to 148 from 143 at end-2005. Only 34 countries reported exchange restrictions and/or MCPs at end-2006.

    • Among controls on the current account, both trade-related measures and controls on invisible transactions were liberalized to a significant extent.

    • In the area of capital account transactions, changes reported by countries until mid-July 2007 show a general trend toward easing of controls. However, a few countries introduced market-based capital controls mainly to stem capital inflows (the topic of the differentiation of controls in the context of handling foreign exchange inflows is discussed in more detail in the Annex to this Introduction).

    • A significant portion of the measures introduced in the financial sector were of a prudential nature,6 while some affected capital controls. Whereas the majority of the changes in this category affecting capital account transactions aimed at relaxing rules and controls, the prudential measures for banks and other credit institutions were primarily geared toward tightening them.

    The sections below highlight developments in the major areas covered in this edition. Details of the exchange arrangements and regulatory frameworks for current and capital transactions in member countries are presented in the individual country chapters.

    A. Developments in Exchange Arrangements

    The exchange arrangements maintained by members are classified into eight categories.7 These categories are based on the flexibility of the arrangement and how it operates in practice—i.e., the de facto regime is described instead of following the de jure or official description of the arrangement. The individual categories are defined in detail in the Compilation Guide.

    • In 2006, there was a continuing shift to tighter control of nominal exchange rates in several member countries. Table 1 shows the change in exchange rate arrangements of IMF members since 2006, and Table 5 provides the current classification of countries and their monetary policy framework. There was an increase in less flexible exchange rate arrangements, such as conventional pegs, while the number of independent and managed floaters decreased. The list of countries and the changes observed in 2006 are described in Table 6. The main change in classifications (not considering changes resulting from the reclassification of the monetary unions discussed below) encompassed the increase in the number of conventional pegs to 56 countries, mainly reflecting tighter control over the exchange rates of countries previously classified as managed floating (e.g., Argentina), and the decrease in the rate of crawl of some crawling pegs (e.g., Bolivia and the Islamic Republic of Iran). In most of these cases, the authorities have not made official commitments to maintaining the exchange rate level, and the de facto peg arose because the authorities resisted appreciation pressures while managing their currency with reference to the U.S. dollar.

    • The 2007 report implements a new treatment of monetary unions. They are now classified based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender. As a result, members of the European Union became independent floaters (13 countries), members of the CAEMC (6 countries) and members of the WAEMU (8 countries) became conventional fixed pegs, and members of the ECCU became currency boards (6 countries). For the latter three monetary unions, the reclassification emphasized the external anchors and the specificities of the monetary regime (the currency board).

    • The dollar remained the most common reference currency for pegs. The SDR is now rarely used. The role of the euro remains limited to countries with historical (CFA franc zone) or geographic links with the EMU. Some members began to rely more heavily on the euro in their foreign exchange reserves management and their exchange rate policy (Kuwait, Russia, and Tunisia). This has not yet amounted to an observable classification trend, but the reason some members aim to shift to such an arrangement is to cope with dollar depreciation pressures while continuing to tightly manage their exchange rate with respect to an external anchor.

    • The number of crawling pegs increased with the addition of countries that decided to let their exchange rate appreciate but, at the same time, wanted to closely control the pace of the appreciation and limit volatility (Azerbaijan, China). Appreciation pressures can be explained for the most part by large external inflows. These inflows, in conjunction with relatively thin foreign exchange markets, can lead to disruptive fluctuations of the exchange rate.

    • Against the backdrop of strong external pressures (most often for appreciation), several independent floaters, such as Armenia, Tanzania, and Uganda, used intervention policies that go beyond limiting very short-run volatility in the exchange rate. Accordingly, their exchange rate arrangements have been reclassified from independent to managed float.

    Table 6.Changes and the Resulting Reclassifications of Exchange Rate Regimes, End-April 2007
    Change RecordedArrangement in the 2006 AREAER1Current De Facto Regime
    AngolaEffective June 1, 2005, reflecting the stability of the kwanza exchange rate owing to Banco Nacional de Angola interventions, the de facto exchange rate arrangement of Angola was reclassified as a conventional fixed peg from managed floating with no predetermined path for the exchange rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement
    ArgentinaEffective June 1, 2006, reflecting the stability of the peso exchange rate owing to Central Bank of the Argentine Republic interventions, the de facto exchange rate arrangement has been reclassified as a conventional pegged arrangement from managed floating with no predetermined path for the exchange rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement
    ArmeniaSince May 2006, the Central Bank of Armenia increased the size and frequency of interventions in an effort to resist appreciation. As a result, the exchange arrangement has been reclassified, effective June 1, 2006, to the category managed floating with no predetermined path for the exchange rate from the category independently floating.Independently floatingManaged floating with no predetermined path for the exchange rate
    AzerbaijanSince early 2006, the Azerbaijan National Bank (ANB) has started to appreciate the exchange rate along a smooth path. In September 2006, the minister of finance indicated that the exchange rate was expected to be at manat 0.85-0.87 per US$1 by end-2006. As a result, the exchange arrangement has been reclassified, effective January 1, 2006, to the category crawling peg from the category conventional pegged arrangement.Conventional pegged arrangementCrawling peg
    BoliviaAlthough Bolivia continues to maintain a de jure crawling peg arrangement, the rate of crawl of the exchange rate has been near zero vis-à-vis the U.S. dollar from January 2006 to January 2007 because of appreciation pressures from hydrocarbons exports. Starting January 2007, the central bank gradually appreciated the currency but at a very moderate pace until end-April 2007. As a result, the exchange rate arrangement has been reclassified, effective January 1, 2006, to the category conventional pegged arrangement from the category crawling peg.Crawling pegConventional pegged arrangement
    CFA Franc ZoneEffective January 1, 2007, the exchange arrangement of the WAEMU countries has been reclassified to the category conventional pegged arrangement from the category exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender.Exchange arrangement with no separate legal tenderConventional pegged arrangement
    ChinaSince the July 2005 revaluation, the exchange rate has appreciated by about 5% until end-April 2007, while the rate has remained in a 2% crawling band. The observed path of the exchange rate and information on intervention and reserves buildup suggest that the exchange rate is determined mainly by official action, resulting in a classification as a crawling peg, effective August 1, 2006.Conventional pegged arrangementCrawling peg
    Costa RicaOn October 17, 2006, the central bank of Costa Rica replaced the crawling peg with a crawling band. The edges of the band are periodically adjusted. On January 31, 2007, the rate of crawl of the band’s floor was reduced by C 0.06 a day to zero and that of the ceiling by C 0.03 a day to C 0.11, allowing for a faster widening of the band. As a result, the arrangement has been reclassified, effective October 1, 2006, to a crawling band arrangement from a crawling peg.Crawling pegCrawling band
    ECCUEffective January 1, 2007, the exchange arrangement of the ECCU countries has been reclassified to the category currency board arrangement from the category exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender.Exchange arrangement with no separate legal tenderCurrency board arrangement
    EthiopiaThe exchange rate of the birr vis-à-vis the U.S. dollar remains very stable despite minor incremental adjustments at end-April 2007. As a result, the exchange rate arrangement has been reclassified, effective October 1, 2003, to the category conventional pegged arrangement from the category managed floating with no predetermined path for the exchange rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement
    Euro AreaEffective January 1, 2007, the exchange arrangement of the European Economic and Monetary Union countries has been reclassified to the category independently floating from the category exchange arrangement with no separate legal tender. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender.Exchange arrangement with no separate legal tenderIndependently floating
    Iran, I. R. ofAlthough the Islamic Republic of Iran continues to maintain a de jure crawling peg arrangement based on a basket, the rate of crawl of the exchange rate has been near zero vis-à-vis the U.S. dollar since October 2006. As a result, the exchange rate arrangement has been reclassified effective October 1, 2006, to the category conventional pegged arrangement to a composite from the category crawling peg.Crawling pegConventional pegged arrangement
    IraqUnder a policy of pursuing exchange rate stability, the Central Bank of Iraq (CBI) limited the fluctuations of the dinar to within ±1%, until October 2006. Since then the CBI has changed its monetary stance and allowed the exchange rate to gradually appreciate following a predetermined path. As a result, the exchange arrangement of Iraq has been reclassified, effective November 1, 2006, to the category crawling peg from the category conventional pegged arrangement.Conventional pegged arrangementCrawling peg
    MongoliaEffective June 1, 2006, reflecting the stability of the togrog exchange rate owing to Bank of Mongolia interventions, the de facto exchange rate arrangement of Mongolia was reclassified to a conventional pegged arrangement from managed floating with no predetermined path for the exchange rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement
    Montenegro, Rep. ofThe euro circulates as legal tender.New memberExchange arrangement with no separate legal tender
    NigeriaEffective January 1, 2006, reflecting the stability of the naira exchange rate owing to Central Bank of Nigeria interventions, the de facto exchange rate arrangement of Nigeria was reclassified to a conventional pegged arrangement from managed floating with no predetermined path for the exchange rate.Managed floating with no predetemined path for the exchange rateConventional pegged arrangement
    RwandaThe exchange rate of the Rwanda franc has remained very stable vis-à-vis the U.S. dollar. As a result, the exchange rate regime has been reclassified, effective January 1, 2006, to the category conventional pegged arrangement from the category managed floating with no predetermined path for the exchange rate. The exchange rate of the Rwanda franc is determined in the foreign exchange market; however, the authorities intervene to influence the rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement
    SeychellesEffective October 9, 2006, the appreciation limit of SR 5.50 per US$1 has been removed. Consequently, the exchange rate arrangement has been reclassified to the category conventional pegged arrangement against a composite from the category conventional pegged arrangement against a single currency.Conventional pegged arrangement against a single currencyConventional pegged arrangement against a composite
    Sierra LeoneThe authorities have adopted a policy of gradually adjusting the central exchange rate vis-à-vis the U.S. dollar. As result, the exchange rate regime has been reclassified, effective January 1, 2006, to the category crawling peg from the category independently floating.Independently floatingCrawling peg
    SloveniaIn July 2006, the council of the European Union adopted a decision allowing Slovenia to join the euro area as from January 1, 2007, and set the permanent conversion at 239.640 tolar to the euro. Consequently, effective January 1, 2007, the exchange arrangement of Slovenia has been reclassified to the category independently floating from the category pegged exchange rate within horizontal bands.Pegged exchange rate within horizontal bandsIndependently floating
    TanzaniaThe Central Bank of Tanzania (BOT) has to deal with substantial official inflows in a shallow foreign exchange market, frequently making the BOT a very large intervener. Given that interventions under an independent float are limited to avoid disruptive exchange rate fluctuations, the exchange rate arrangement has been reclassified to managed floating with no predetermined path for the exchange rate from independently floating, effective April 30, 2007.Independently floatingManaged floating with no predetermined path for the exchange rate
    UgandaTo deal with official inflows and for monetary policy purposes, the Bank of Uganda extended its intervention policy beyond avoiding market-disruptive exchange rate fluctuations. As a result, the exchange rate arrangement has been reclassified, effective April 30, 2007, to managed floating with no predetermined path for the exchange rate from independently floating.Independently floatingManaged floating with no predetermined path for the exchange rate
    UzbekistanSince mid-2006, the sum has been very stable vis-à-vis the dollar within a 2% band while the Central Bank of Uzbekistan’s (CBU) one-sided interventions resulted in steady reserve accumulation. As a result, the exchange rate regime has been reclassified, effective May 31, 2006, to the category conventional pegged arrangement from the category managed floating with no predetermined path for the exchange rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement
    Yemen, Republic ofAlthough the de jure regime is an independent float, the Yemeni rial was remarkably stable against the dollar, remaining within a 2% band. As a result the exchange rate regime has been reclassified, effective February 1, 2006, to the category conventional pegged arrangement from the category managed floating with no predetermined path for the exchange rate.Managed floating with no predetermined path for the exchange rateConventional pegged arrangement

    As indicated in the 2006 AREAER.

    Other exchange rate arrangements did not change much during the period April 2006-April 2007. On balance, the changes tended to ease controls (Table 2).

    • On January 1, 2007, Slovenia adopted the euro as its sole legal tender.

    • The most noticeable change in exchange rate structure is the increase in the number of countries maintaining dual or multiple exchange rates. Four countries were reclassified to having dual or multiple exchange rate structures because they introduced exchange measures that may lead to spreads exceeding 2% between exchange rates applied for different transactions. Conversely, the Syrian Arab Republic reduced the number of its exchange rates, and hence the exchange rate structure has been reclassified to dual from multiple. In addition, the exchange rate structure in some countries was reclassified as of January 1, 2006. The new classification reflects only a technical correction and does not imply that there has been a significant change in the exchange rate regime of these countries affecting the exchange rate structure.8

    • Finally, Brazil, China, India, Malaysia, and Vietnam changed their regulations to facilitate the development of their forward exchange markets.

    II. ACCEPTANCE OF ARTICLE VIII OBLIGATIONS AND EXCHANGE MEASURES

    This section provides a brief overview of the status in accepting Article VIII obligations and describes the recent developments in exchange measures, including exchange restrictions and multiple currency practices (MCPs) subject to the provisions of Article VIII of the Fund’s Articles of Agreement. In addition, this section also covers the restrictions that countries impose to protect national and international security.

    A. Article VIII Obligations

    Accepting the obligations of the IMF’s Article VIII, Sections 2, 3, and 4, members commit to refrain from imposing restrictions on the making of payments and transfers for current international transactions and from engaging in discriminatory currency arrangements or MCPs, except with IMF approval. The continued trend toward acceptance of Article VIII obligations observed until December 2005 came to a halt in 2006. In early 2007, the Republic of Montenegro became an IMF member9 and accepted the obligations of Article VIII. As a result, since 2005 the number of IMF member countries increased to 185, and the number of countries in Article VIII status increased by one to 166 (out of the 188 in this report). The number of countries that have not yet accepted the obligations of Article VIII, Sections 2, 3, and 4, and continue to avail themselves of the transitional arrangements of Article XIV remained unchanged at 19.

    B. Exchange Measures

    Restrictions and/or Multiple Currency Practices

    Major findings on the existence of exchange restrictions during 2006 are the following:

    • The number of countries that do not maintain any restrictions on the making of payments and transfers for current international transactions or do not engage in discriminatory currency arrangements or MCPs increased to 148 (79%) from 143 (76%) in 2005.10

    • Out of the 34 countries that maintain some type of exchange restrictions,11 the majority have already accepted the obligations of Article VIII, while a few of the countries are under the transitional arrangements of Article XIV.

    • Among countries maintaining exchange restrictions, the most widely used restrictions are different types of controls on the making of payments and transfers for current invisible transactions (Tables 3 and 7). In general, most countries that maintain restrictions apply quantitative limits (for example, Mozambique and Myanmar) and documentary requirements on foreign exchange allowance for certain current international transactions, including payments for travel and profit remittances (for example, Ethiopia and Lao P.D.R. require tax certification for these transactions). In total, 16 countries (including Botswana, Burundi, Colombia, the Islamic Republic of Iran, and São Tomé and Príncipe) also maintained MCPs in 2006. In addition, a few countries maintained restrictions in the form of frozen foreign currency deposits (for example, Bosnia and Herzegovina and the former Yugoslav Republic of Macedonia), margin deposit requirements for certain imports (for example, Sri Lanka), or as evidenced by the accumulation of private external payment arrears (for example, Malawi).

    Table 7.Type of Restrictions and/or Multiple Currency Practices Maintained by Countries, December 31, 2006

    (Based on information in published IMF staff reports)1

    CountryRestrictions and/or Multiple Currency Practices
    AlbaniaThe staff report for the 2006 Article IV consultation with Albania states that as of July 10, 2006, Albania’s exchange rate arrangement was free from exchange restrictions and multiple currency practices subject to Fund jurisdiction under Article VIII. However, the country still availed itself of the transitional arrangements under Article XIV and maintained exchange restrictions in the form of outstanding debit balances on inoperative bilateral payment agreements, which were in place before Albania became a Fund member. These relate primarily to debt in nonconvertible and formerly nonconvertible currencies, which the authorities are working to resolve by mid-2007 for official creditors, and by end-2007 for private sector creditors. (Country Report No. 06/286)
    ArubaThe staff report for the 2005 Article IV consultation with the Kingdom of the Netherlands-Aruba states that as of April 11, 2005, Aruba maintained a foreign exchange restriction arising from the foreign exchange tax on payments by residents to nonresidents. This tax, which amounts to 1.3% of the transaction value, was introduced when Aruba was part of the Netherlands Antilles, to generate revenue for the government. Aruba adopted it after gaining autonomy (status aparte) in 1986. Since then, it has served as a source of general tax revenue for the central government of Aruba. (Country Report No. 05/204)
    BangladeshThe staff report for the fifth review under the Three-Year Arrangement under the Poverty Reduction and Growth Facility with Bangladesh states that as of October 10, 2006, Bangladesh maintained a restriction on the convertibility and transferability of proceeds from nonresident taka accounts. (Country Report No. 06/406)
    Bosnia and HerzegovinaThe staff report for the 2006 Article IV consultation with Bosnia and Herzegovina states that as of September 29, 2006, Bosnia and Herzegovina maintained restrictions arising from measures taken with respect to frozen foreign currency deposits, mainly on the transferability of balances and interest accrued for nonresidents. (Country Report No. 06/371)
    BotswanaThe staff report for the 2006 Article IV consultation with Botswana states that as of December 4, 2006, Botswana maintained a multiple currency practice subject to Fund approval under Article VIII, Sections 2(a) and 3, arising from the Foreign Exchange Risk-Sharing Scheme (FERSS) applicable to outstanding external loans obtained by certain public enterprises before October 1, 1990. (Country Report No. 07/227)
    BurundiThe staff report for the 2006 Article IV consultation with Burundi states that as of July 5, 2006, Burundi maintained two multiple currency practices inconsistent with Article VIII, Section 3, arising from or in connection with the current Dutch auction system, and one exchange restriction inconsistent with Article VIII, Section 2 (a), resulting from the authorization process that is applied to certain current international transactions. One multiple currency practice results from the fact that no mechanism limits the potential variation of winning bids from differentiating from each other by more than 2 percent. The other multiple currency practice results from the fact that the exchange rate used for government transactions takes place at a rate that may differ by more than 2 percent from market exchange rates. The exchange restriction results from the central bank having discretion to refuse to authorize the sale of foreign exchange for reasons other than in connection with verifying the bona fide nature of the transaction. An exchange restriction was eliminated on May 30, 2006. (Country Report No. 06/311)
    ColombiaThe staff report for the 2006 Article IV consultation with Colombia states that as of October 16, 2006, Colombia maintained the following two exchange measures subject to Fund approval under Article VIII: (a) an exchange restriction arising from a special foreign exchange regime for the hydrocarbon sector that limits the availability of foreign exchange for branches of foreign corporations that choose to participate in the regime and (b) a multiple currency practice and an exchange restriction arising from a tax on remittances abroad of nonresident income which is withheld when the foreign exchange is purchased. (Country Report No. 06/408)
    Congo DRThe staff report for the Staff Monitored Program states that as July 5, 2006, the Democratic Republic of the Congo maintained measures that give rise to one restriction and one multiple currency practice (MCP) subject to Fund approval under Article VIII of the Fund’s Articles of Agreement. The exchange restriction involves an outstanding net debit position vis-à-vis other contracting members under the inoperative regional payments agreement with the Economic Community of the Great Lakes Countries (CEPGL). The multiple currency practice involves a fixed exchange rate set on a quarterly basis applying to transactions through the bilateral payments agreement (BPA) with Zimbabwe. (Country Report No. 06/259)
    EcuadorThe staff report for the 2005 Article IV consultation with Ecuador states that as of January 5, 2006, Ecuador maintains an exchange restriction subject to Fund approval under Article VIII, Section 2 (a), in the form of a freeze on demand and savings deposits held in closed banks managed by the Deposit Guarantee Agency. (Country Report No. 06/98).
    EthiopiaThe staff report for the 2005 Article IV consultation with the Federal Democratic Republic of Ethiopia states that as of March 6, 2006, Ethiopia maintained exchange restrictions relating to (a) the tax certification requirement for repatriation of investment income; (b) restrictions on repayment of legally entered into external loans and supplies and foreign partner’s credits; (c) rules for issuance of import permits; and (d) the requirement to provide a clearance certificate from the National Bank of Ethiopia (NBE) to obtain import permits. (Country Report No. 06/159)
    GuineaThe staff report for the 2005 Article IV consultation with Guinea states that as of December 5, 2005, Guinea maintained a multiple currency practice arising from the potential divergence of the official reference rate and the interbank market rate of more than 2%. (Country Report No. 06/37)
    IndiaThe staff report for the 2006 Article IV consultation with India states that as of November 29, 2006, India maintained the following restrictions on the making of payments and transfers for current international transactions, which are subject to Fund approval under Article VIII, Section 2(a): restrictions related to the non-transferability of balances under the India-Russia debt agreement; restrictions arising from unsettled balances under inoperative bilateral payments arrangements with two Eastern European countries; and a restriction on the transfer of amortization payments on loans by non-resident relatives. (Country Report No. 07/63)
    Iran, I. R. ofThe staff report for the 2005 Article IV consultation with the Islamic Republic of Iran states that as of March 8, 2006, the Islamic Republic of Iran maintained one exchange restriction and two multiple currency practices subject to Fund jurisdiction under Article VIII, Sections 2(a) and 3. The exchange restriction arises from limitations set out in the bylaws adopted to implement the Foreign Investment and Promotion Act on the transferability of (periodic) rial profits from certain foreign direct investments. The multiple currency practices arise from: budget subsidies for foreign exchange purchases in connection with payments of certain letters of credit opened prior to March 21, 2002, under the previous multiple exchange rate system; and obligation of entities that had received allocation of foreign exchange for payments based on subsidized “allocated rates” under the previous multiple exchange rate system to surrender unused allocations to the Central Bank of Iran (CBI) at the allocation rate. (Country Report No. 06/154)
    Lao P.D.R.The staff report for the 2005 Article IV consultation with the Lao People’s Democratic Republic states that as of February 22, 2006, the Lao P.D.R. maintained a restriction subject to Fund approval under Article VIII (tax payment certificates are required for some transactions). (Country Report No. 06/399)
    Macedonia, FYRThe staff report for the 2006 Article IV consultation with the Former Yugoslav Republic of Macedonia states that as of July 14, 2006, FYR Macedonia maintained an exchange restriction subject to the Fund’s approval under Article VIII, Section 2(a), arising from restrictions imposed on the transferability of proceeds from current international transactions contained in the former frozen foreign currency savings deposits. (Country Report No. 06/344)
    MalawiThe staff report for the second review under the Poverty Reduction and Growth Facility and Request for Waiver of Performance Criteria with Malawi states that as of August 16, 2006, Malawi maintained an exchange restriction (as evidenced by the private external payment arrears) and a multiple currency practice under Article VIII (arising from the significant spread between the commercial bank exchange rate and the rates at foreign exchange bureaus). (Country Report No. 06/445)
    MozambiqueThe staff report for the fifth review under the Three-Year Arrangement under the Poverty Reduction and Growth Facility with the Republic of Mozambique states that as of December 4, 2006, Mozambique maintained restrictions on the making of payments and transfers for current international transactions subject to Fund approval under Article VIII as evidenced by: (i) the discretionary prior approval for remittances of family living expenses; (ii) the authorization for the purchase of foreign exchange in excess of US$5,000 for certain transactions; (iii) the prohibition for the conversion of balances of nonresidents’ domestic currency accounts into foreign currency or transfer abroad; and (iv) the need for proof of performance of a service prior to authorizing its payment. (Country Report No. 07/36)
    MyanmarThe staff report for the 2006 Article IV consultation with Myanmar states that as of September 20, 2006, Myanmar maintained exchange restrictions and multiple currency practices subject to Fund approval under Article VIII. These include (i) limits on the availability of foreign exchange for foreign travel by residents, (ii) limits on remittances of wage income by nonresidents, and (iii) limits on payments and transfers for certain other invisible transactions, and a multiple currency practice resulting from the divergence between the official exchange rate and the parallel market-determined FEC rate.
    PakistanThe staff report for the 2006 Article IV consultation with Pakistan states that as of November 1, 2006, Pakistan maintained an exchange restriction on payments for current international transactions subject to Fund approval under Article VIII, Section 2a, resulting from limitations on advance payments for certain imports. (Country Report No. 06/426)
    São Tomé and PríncipeThe staff report for the third review of the Three-Year Arrangement with São Tomé and Príncipe states that as of December 29, 2006, São Tomé and Príncipe maintained exchange restrictions and multiple currency practices subject to Fund approval under Article VIII. The authorities intend to remove the exchange restriction on transfers abroad of dividends with the new Investment Code. The remaining exchange restriction and multiple currency practice is related to the possibility of rationing at the auctions by the central bank, and of commercial bank rates deviating, temporarily, by more than 2 percent from the Banco Central de São Tomé and Príncipe reference rate in-between auctions. In 2006, the multiple currency practice spread between the central bank buying and selling rate was eliminated and the spread was set at 2 percent. (Country Report No. 07/102)
    Sri LankaThe staff report for the 2006 Article IV consultation with Sri Lanka states that as of November 2, 2006, Sri Lanka maintained an exchange restriction inconsistent with Article VIII, Section 2(a), of the Fund’s Articles by requiring importers to deposit with commercial banks margins of 50% of the total invoice value with respect to the import of certain goods (and 100% with respect to certain vehicles). In particular, these measures restrict current payments due in connection with letters of credit (which are normal short-term banking and credit facilities under Article XXX(d)). (Country Report No. 06/466)
    SurinameThe staff report for the 2005 Article IV consultation with Suriname states that as of February 8, 2006, Suriname maintained multiple currency practices subject to Fund approval arising from (i) the absence of a mechanism to prevent a possible deviation of more than 2 percent between the official exchange rate used for government transactions and the market-determined bank/cambios rate and (ii) the preferential exchange rate for infant formula imports. (Country Report No. 06/135)
    Syrian Arab RepublicThe staff report for the 2006 Article IV consultation with the Syrian Arab Republic states that as of July 14, 2006, Syria maintained under Article XIV restrictions on payments and transfers for current international transactions, including administrative allocation of foreign exchange. Syria also maintains exchange measures that are subject to Fund approval under Article VIII: (i) a prohibition against purchases by private parties of foreign exchange from the banking system for some current international transactions; (ii) a multiple currency practice resulting from divergences of more than 2% between the official exchange rate and officially recognized exchange rates; (iii) a non-interest-bearing advance import deposit requirement of 75% to 100% for public sector imports as well as private sector imports which are not financed from abroad; and (iv) an exchange restriction arising from the net debt under inoperative bilateral payments arrangements with the Islamic Republic of Iran and Sri Lanka. (Country Report No. 06/294)
    TunisiaThe staff report for the 2006 Article IV consultation with Tunisia states that as of May 10, 2006, Tunisia maintained a multiple currency practice resulting from honoring exchange rate guarantees extended prior to August 1988 to development banks, which will automatically expire after the existing commitments have matured. (Country Report No. 06/207)
    ZimbabweThe staff report for the 2005 Article IV consultation with Zimbabwe states that as of August 1, 2005, Zimbabwe maintained restrictions on the making of transfers and payments for current international transactions, and multiple currency practices, inconsistent, respectively, with Article VIII, Sections 2(a) and 3, of the Fund’s Articles of Agreement. Zimbabwe maintains multiple currency practices (MCP) arising from the lack of a mechanism to prevent a divergence of more than 2 percent between (i) the exchange rates in the official and parallel markets, (ii) the exchange rates applicable for private sector imports and government imports, (iii) the exchange rates paid by successful bidders in the same tender, (iv) the exchange rate used for surrender of export receipts, including from international gold sales (weighted average rate from each auction) and the other rates in the exchange market, and (v) the exchange rate applicable to inward remittances of foreign exchange. Zimbabwe also maintains exchange restrictions arising from (i) limitations on the availability of foreign exchange, in the form of priority lists that limit the provision of foreign exchange for certain specified transactions which are subject to the approval of the Reserve Bank of Zimbabwe (RBZ), and (ii) the existence of private sector external payment arrears inconsistent with Article VIII, Section 2(a). (Country Report No. 05/360).
    Source: IMF staff reports.

    The measures described in this table may have changed subsequent to the date mentioned. The table does not include countries maintaining exchange restrictions or multiple currency practices whose staff reports are unpublished.

    Countries continued to eliminate exchange restrictions in 2006 in order to gain the benefits of liberalization.12 For example, Burundi eliminated an exchange restriction on May 30, 2006. Mauritania removed an exchange restriction under Article VIII arising from foreign exchange rationing and thus maintains an exchange system free of restrictions.

    • The number of countries (such as Iraq and Nigeria) for which sufficient information was not available in 2006 to assess the existence of exchange restrictions has been reduced to six from nine in 2005.13 For three countries in this category (including Egypt), staff review of the foreign exchange system concluded that the relevant exchange system was free of exchange restrictions and MCPs as of December 31, 2006.

    • Only two countries introduced new exchange restrictions or MCPs during the reporting period.

    International Security Restrictions

    The trend toward more regularly notifying the IMF of restrictions introduced for national and international security reasons continued in 2006. Exchange restrictions have to be reported to the IMF, irrespective of their purpose.14 In 2006 and early 2007, 16 country authorities fulfilled this obligation and notified the IMF of security-related restrictions. All these countries (consisting mostly of developed industrial countries) reported that they imposed financial sanctions and restrictions to fight against financial terrorism, in accordance with relevant UN Security Council resolutions and EU regulations.

    III. REGULATORY FRAMEWORK FOR FOREIGN EXCHANGE TRANSACTIONS

    This section documents the major developments and changes in a large number of categories, including arrangements for payments and receipts, trade-related (export/import) measures, payments for invisible transactions and current transfers, regulations on resident and nonresident accounts, and capital account transactions. The following are the broad features of these measures in three major categories.

    A. Trade Measures

    The category of trade-related measures covers exchange and trade restrictions on exports and imports. Overall, there was an easing of trade-related measures during 2006 and until mid-July 2007. Out of the 140 measures reported by 52 countries in the category of imports and import payments, the majority aimed at liberalization of controls, by lifting import bans on certain goods, reducing tariff rates, and eliminating documentation requirements for certain imports. Tightening of measures on imports and import payments mostly took the form of import prohibitions and increases in import duty rates on certain goods. A similar easing of controls was observed in the category of exports and export proceeds. Most changes in this category in 2006 were in repatriation and surrender requirements of export proceeds. Out of 30 countries reporting changes in this category, 12 countries relaxed the repatriation and surrender requirements and only 3 countries introduced or increased controls on these transactions.

    B. Regulations Related to Current Invisible Transactions

    In general, the extent of exchange controls on current invisible transactions declined during 2006 and until mid-July 2007. Out of 50 countries that liberalized controls on payments and transfers for current account transactions, the majority either abolished or raised the quantitative limits on the availability of foreign exchange for making payments for these transactions. A number of countries in this category also relaxed the documentation and/or approval requirements for current invisible transactions. With respect to regulations related to resident and nonresident accounts, countries most often moved to ease controls, allowing residents and nonresidents more access to foreign currency accounts to facilitate their current international transactions.

    C. Capital Controls

    As in 2005 and as in other categories, during 2006 and until mid-July 2007 the general trend toward easing of controls was also seen in controls on capital transactions. Sixty-five countries informed the IMF of about 200 changes in different categories of capital controls, including controls on capital and money market instruments, credit operations, foreign direct investment (FDI), real estate, and personal capital transactions. Of these changes, only 38 entailed the introduction of limitations on some capital transactions. A few countries introduced market-based capital controls mainly to stem capital inflows. For example, Colombia introduced a 40% unremunerated reserve requirement (URR) on portfolio inflows. Similarly, effective December 19, 2006, Thailand imposed a 30% URR on certain types of capital inflows.15 Among the measures intended to liberalize capital controls, the majority eased controls on capital and money market and derivatives instruments. The controls on FDI were also liberalized in several members. For example, India allowed FDI inflows up to 100% in certain sectors, while Korea raised the limit on outward FDI to US$10 million from US$3 million. In addition, several members eased controls on real estate transactions, allowing residents (nonresidents) to acquire real estate abroad (locally). In contrast, as part of broad measures to stem capital flight, investments abroad were suspended and limits on credit operations were decreased in Fiji.

    IV. PROVISIONS FOR COMMERCIAL BANKS AND INSTITUTIONAL INVESTORS

    This section reviews the major developments related to provisions specific to commercial banks and institutional investors. with a focus on some prudential measures which are in the nature of capital controls.16 The category “Provisions specific to the financial sector” describe monetary, prudential, and foreign exchange controls.17 For example, some of these items (among others, borrowing abroad, lending to nonresidents, purchase of locally issued securities denominated in foreign exchange, and investment regulations) may be similar or identical to the entries under respective categories of controls on capital and money market instruments, credit operations, or direct investments, if the same regulations apply to commercial banks as to other residents. In such case, the entry also appears in the respective category in the Section “Capital Transactions.”

    The main changes in the measures under this category during 2006 and until mid-July 2007 are presented in Table 4 and can be summarized as follows:

    • For provisions specific to commercial banks and other credit institutions, the majority of the changes reported by 55 countries were prudential-type controls (79 of the total 106 measures in this category could be categorized as prudential controls). Although most countries moved toward liberalization of capital controls in this category, the changes in the prudential regulations were primarily geared toward tightening. The most important types of tightening include increases in reserve requirements for commercial banks and other credit institutions (for example, Botswana, India, and Georgia); limits on loans in foreign currency (for example, Lebanon), and tighter limits on foreign exchange positions (for example, Kazakhstan and the Philippines).

    • As with changes in the provisions specific to commercial banks and other credit institutions, the majority of changes in the provisions specific to nonbank financial institutions were related to changes in prudential regulations (of the total 32 measures undertaken, only 12 were capital controls). However, the direction of changes in these measures was different from those in commercial banks, with 17 measures (6 prudential controls and 11 capital controls) moving toward easing. The most notable of these was the easing of controls on unit trust management companies and insurers, allowing them to invest abroad a larger proportion of the assets under their management. For example, Malaysia increased the investment limit for resident institutional investors in foreign currency assets. Similarly, Thailand allowed selected institutional investors to invest without limits in securities issued abroad by Thai juridical persons.

    A number of reported changes in the provisions specific to the financial sector could not be linked directly to the easing or tightening of rules because they were made mainly to allow the creation or development of instruments and institutions of prudential oversight. These changes are recorded as neutral and institutional changes and include most of the changes to the methods of calculating net open positions of banks, setting limits on securities exposure, and establishing prescriptions for determining the technical provisions of insurance companies. Some other measures simply reflect new circumstances, most notably changes in the remuneration of reserves (except when the remuneration was eliminated, which was considered tightening).

    ANNEX: CAPITAL CONTROLS AND CAPITAL INFLOWS

    In recent years, capital inflows in emerging market economies have once again been on the upswing, reflecting both domestic and global developments. While capital inflows are often beneficial to recipient countries and an indicator of increased integration of these economies in the global market, the sheer magnitude of the flows, their more volatile nature, and recent episodes of market turbulence have led to some concerns about the risks. Risk are seen as arising not so much from growing foreign direct investment, but from significant surges in short-term and more volatile flows, particularly portfolio equity investment flows, and in certain countries, banks’ foreign borrowings.

    The policy response to increasing capital inflows has focused on macroeconomic measures, such as fiscal consolidation, reserve accumulation, greater exchange rate flexibility, and monetary easing. In addition, countries have adopted prudential measures to affect the magnitude and composition of flows and mitigate financial sector risks.

    Capital controls, by contrast, have been used in relatively few instances, as seen in Section III.C. When controls were tightened, they consisted mainly of indirect measures rather than the more traditional administrative controls. This section provides some background information on capital controls and their use, with a special emphasis on indirect controls on inflows.

    Capital Controls—An Overview

    The aim of capital controls is to affect the volume and/or the composition of cross-border capital flows, often to gain greater room of maneuver for domestic macroeconomic policies or reduce risks to the domestic financial sector. Depending on policymakers’ objectives, controls may seek to limit inflows, outflows, or both. Often, controls on inflows have been introduced because of concerns about the damage that a sudden stop or reversal of capital flows might cause.

    Capital controls can take two main forms: direct or administrative controls and indirect or market-based controls.18

    Direct controls

    Direct or administrative controls usually take the form of regulations on cross-border financial transactions. Typically, they restrict capital transactions and/or the associated payments and transfers of funds through outright prohibitions, explicit quantitative limits, or an approval procedure (which may be rule-based or discretionary). A common characteristic of such controls is that they impose administrative obligations on the banking system to control transactions and often involve significant documentation requirements. Enforcement of direct controls also requires adequate administrative capacity in the foreign exchange authority (usually the central bank). The specific categories of administrative controls correspond to the balance of payments categories in the AREAER’s Country Table Matrix (Appendix) and are not repeated here.

    Indirect controls

    Indirect or market-based controls discourage capital movements by making the associated transactions more costly. Such controls may take various forms, including dual or multiple exchange rate systems, explicit or implicit taxation of cross-border financial flows,19 and other, predominantly price-based, measures. Depending on their specific type, market-based controls may affect the price or the volume of a given transaction.

    In dual (two-tier) or multiple exchange rate systems, different exchange rates apply to different types of transactions. In essence, the two-tier market attempts to raise the cost of certain outward or inward investments by applying a more depreciated (appreciated) exchange rate to such transactions than that used for other transactions. Thus, a less favorable exchange rate may be applied to domestic credit needed to establish a net short domestic currency position for transactions identified as speculative, while other domestic credit demand can be satisfied at a more favorable exchange rate. Two-tier foreign exchange markets have typically been established when the authorities have seen high short-term interest rates as imposing an unacceptable burden on residents. Sometimes they also asked or instructed domestic financial institutions not to lend to borrowers engaged in speculative activity, leading to the development of another market with different exchange rates for such transactions. The use of this type of control has diminished over time, and there are only 13 countries that still apply different exchange rates to some foreign exchange transactions. In the AREAER, this type of control is covered under exchange restrictions and/or the exchange rate structure. The IMF considers most of these measures to be not just capital controls, but also MCPs, insofar as they cover transactions defined as current in the IMF’s Articles of Agreement,20 as explained in the Annex to the Introduction of the 2006 AREAER.

    Explicit taxation of cross-border flows similarly aims at limiting the attractiveness of external financial transactions by reducing their rate of return or raising their cost. Tax rates can be differentiated to discourage certain transaction types or maturities. Such taxation could be considered a control on cross-border activities if it discriminates between domestic and external assets or between nonresidents and residents. In the AREAER, this type of control appears in the category “Exchange tax.”

    Indirect taxation of cross-border flows, in the form of non-interest-bearing compulsory reserve/deposit requirements (or unremunerated reserve requirements, URRs) has been one of the most frequently used market-based controls. Under such schemes, nonresidents or residents are required to deposit with the central bank or commercial banks an amount of domestic or foreign currency equivalent to a proportion of the inflows or net positions in foreign currency at zero interest.21 Because the structure of the AREAER is based on capital account transactions as they appear in the balance of payments, and URRs usually cover several transactions at the same time, they appear in more than one category of capital transactions.

    URRs may function as a selective exchange tax that may be differentiated to discourage particular types of transactions. The effective rate of the tax depends on the period of time during which the funds stay in the country, as well as on the opportunity cost of these funds.

    Because the duration of the investment is inversely related to the implied tax rate, URRs represent a higher burden on short-term investments than on those with a longer term. Hence, URRs were often applied to discourage short-term capital flows, thereby tilting the composition of the flows to long-term investments, which are considered to be more stable.

    Frequently, URRs are applied in conjunction with minimum holding periods, during which the capital may not be repatriated without what would often be a stiff penalty. Country practices vary on the possibility of transferring the income from the investment during the holding period. Residents or nonresidents participating in certain external financial transactions may be required to channel the transactions through dedicated accounts. The mandatory use of the accounts allows the authorities to monitor the amount and composition of capital flows and facilitates the administration of the URR.

    The coverage of transactions subject to URRs can vary, according to the perceived risks. Thus, in some cases, URRs are applied only to external loans, in other cases to all capital inflows. The rules might vary over time even in the same country. If the URR originally encompassed all capital transactions, the rules might be relaxed to exempt certain favored categories of inflows (like FDI or trade credits). If this happens or if the original URR already differentiated among different transaction types and maturities, the market might adopt derivatives strategies based on exempted inflows to circumvent the controls. As a result, similarly to other capital controls, URRs tend to lose their effectiveness over time and in many cases become ever more complicated.

    URRs can be difficult to differentiate from reserve, liquidity, and deposit requirements that are considered monetary policy instruments or prudential rules. The key criterion for distinguishing them is that capital controls are applied asymmetrically to residents and nonresidents. Measures differentiating between domestic and foreign currency transactions are usually understood to be prudential or monetary in nature. Thus, if a central bank does not pay interest on the compulsory reserves of deposit-taking institutions, this does not necessarily mean that the measure is a URR, even though it might still be considered an indirect tax. However, if reserve requirements on nonresidents’ deposits are unremunerated, while those on residents’ deposits bear interest or are exempted from the reserve requirement altogether, the measure would be considered a capital control.

    Other indirect regulatory controls have the characteristics of both price- and quantity-based measures and involve discrimination between different types of transactions or investors. Although they may influence the volume and nature of capital flows, such regulations may at times be motivated by domestic monetary control considerations or prudential concerns. Such controls include provisions for the net external position of commercial banks, asymmetric open position limits that discriminate between long and short currency positions or between residents and nonresidents, and certain credit-rating requirements to borrow abroad. Although not a regulatory control in the strict sense, reporting requirements for specific transactions have also been used to monitor and control capital movements (for example, derivative transactions and non-trade-related transactions with nonresidents).

    Classification of Exchange Rate Arrangements and Monetary Policy Frameworks

    The classification system is based on the members’ actual, de facto regimes, which may differ from their officially announced arrangements. The scheme ranks exchange rate arrangements on the basis of their degree of flexibility and the existence of formal or informal commitments to exchange rate path. It distinguishes among the more rigid forms of pegged regimes (such as currency board arrangements), other conventional fixed peg regimes against a single currency or a basket of currencies, exchange rate bands around a fixed peg, crawling peg arrangements, and exchange rate bands around crawling pegs, in order to help assess the implications of the choice of exchange rate regime for the degree of independence of monetary policy. This includes a category to distinguish the exchange arrangements of those countries that have no separate legal tender. The system presents members’ exchange rate regimes against alternative monetary policy frameworks in order to present the role of the exchange rate in broad economic policy and to illustrate that different forms of exchange rate regimes could be consistent with similar monetary frameworks. The monetary policy frameworks listed are as follows:

    Exchange rate anchor

    The monetary authority stands ready to buy or sell foreign exchange at given quoted rates to maintain the exchange rate at its predetermined level or within a range (the exchange rate serves as the nominal anchor or intermediate target of monetary policy). These regimes cover exchange rate regimes with no separate legal tender, currency board arrangements, fixed pegs with or without bands, and crawling pegs with or without bands, where the rate of crawl is set in a forward-looking manner.

    Monetary aggregate target

    The monetary authority uses its instruments to achieve a target growth rate for a monetary aggregate, such as reserve money, M1, or M2, and the targeted aggregate becomes the nominal anchor or intermediate target of monetary policy.

    Inflation targeting framework

    This involves the public announcement of medium-term numerical targets for inflation, with an institutional commitment by the monetary authority to achieve these targets. Additional key features include increased communication with the public and the markets about the plans and objectives of monetary policymakers and increased accountability of the central bank for obtaining its inflation objectives. Monetary policy decisions are guided by the deviation of forecasts of future inflation from the announced inflation target, with the inflation forecast acting (implicitly or explicitly) as the intermediate target of monetary policy.

    IMF-supported or other monetary program

    This involves implementation of monetary and exchange rate policies within the confines of a framework that establishes floors for international reserves and ceilings for net domestic assets of the central bank. As the ceiling on net domestic assets limits increases in reserve money through central bank operations, indicative targets for reserve money may be appended to this system. Countries that maintain nominal anchors, exchange rate anchors, monetary anchors, or inflation targeting frameworks are classified under those respective rubrics.

    Other

    The country has no explicitly stated nominal anchor, but rather monitors various indicators in conducting monetary policy. This is also used when no relevant information on the country is available.

    COMPILATION GUIDE

    Following a standardized approach, the description of each system is broken down into similar categories, and the coverage for each country includes a final section that lists chronologically the significant changes during 2006 and, in the case of some countries, those that occurred through end-June 2007. The Compilation Guide provides the definitions and methodology used to bring together information under each heading.

    The report is presented in a tabular format that enhances transparency and uniformity of treatment of information across countries and includes coverage on the regulatory framework. The information serves to update the exchange arrangements and exchange restrictions database maintained by IMF staff.1 The country chapters present an abstract of the relevant information that is available to the IMF.

    Status under IMF Articles of Agreement
    Article VIIIThe member country has accepted the obligations of Article VIII, Sections 2, 3, and 4, of the IMF’s Articles of Agreement.
    Article XIVThe member country continues to avail itself of the transitional arrangements of Article XIV, Section 2.
    Exchange Measures
    Restrictions and/or multiple currency practicesExchange restrictions and multiple currency practices maintained by a member country under Article VIII, Sections 2, 3, and 4, or under Article XIV, Section 2, of the IMF’s Articles of Agreement, as specified in the latest IMF staff reports issued as of December 31, 2006.
    International security restrictionsRestrictions on payments and transfers in connection with international transactions imposed by member countries for reasons of national or international security.
    In accordance with IMF Executive Board Decision No. 144-(52/51)International security restrictions on the basis of IMF Executive Board Decision No. 144-(52/51), which establishes the obligation of members to notify the IMF before imposing such restrictions or, if circumstances preclude advance notification, as promptly as possible.
    Other security restrictionsOther restrictions imposed for security reasons (e.g., in accordance with UN or EU regulations) but not notified to the IMF under Board Decision 144-(52/51).
    References to legal instruments and hyperlinksSpecific references to the underlying legal materials and hyperlinks to the legal texts. The category is included at the end of each section.
    Exchange Arrangement
    CurrencyThe official legal tender of the country.
    Other legal tenderThe existence of another currency that is officially allowed to be used in the country.
    Exchange rate structureIf there is one exchange rate, the system is called unitary; if there is more than one exchange rate that may be used simultaneously for different purposes and/or by different entities, and these exchange rates give rise to multiple currency practices or differing rates for current and capital transactions, the system is called dual or multiple. Different effective exchange rates resulting from exchange taxes or subsidies, excessive exchange rate spreads between buying and selling rates, bilateral payments agreements, and broken cross rates are not included in this category.
    ClassificationAs the de facto methodology for classification of exchange rate regimes is based on a backward-looking approach that relies on past exchange rate movement and historical data, some countries are reclassified retroactively to a date when the behavior of the exchange rates changed and matched the criteria for reclassifications to the appropriate category. For these countries, if the retroactive date of reclassification is prior to the period covered in this report, then the effective date of change to be entered in the country chapter and the changes section is deemed to be the first day of the year in which the decision of reclassification took place.
    Exchange arrangement with no separate legal tenderThe currency of another country circulates as the sole legal tender (formal dollarization). Adopting such regimes implies the complete surrender of the monetary authorities’ control over domestic monetary policy. Effective January 1, 2007, exchange arrangements of the countries that belong to a monetary or currency union in which the same legal tender is shared by the members of the union are classified under the arrangement governing the joint currency. The new classification is based on the behavior of the common currency, whereas the previous classification was based on the lack of a separate legal tender. The classification thus reflects only a definitional change, and is not based on a judgment that there has been a substantive change in the exchange regime or other policies of the currency union or its members.
    Currency board arrangementA monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation. This implies that domestic currency will be issued only against foreign exchange and that it remains fully backed by foreign assets, eliminating traditional central bank functions such as monetary control and lender-of-last-resort, and leaving little scope for discretionary monetary policy. Some flexibility may still be afforded, depending on the strictness of the banking rules of the currency board arrangement.
    Conventional pegged arrangementThe country (formally or de facto) pegs its currency at a fixed rate to another currency or a basket of currencies, where the basket is formed from the currencies of major trading or financial partners, and weights reflect the geographic distribution of trade, services, or capital flows. The currency composites can also be standardized, as in the case of the SDR. There is no commitment to irrevocably keep the parity. The exchange rate may fluctuate within narrow margins of less than ±1% around a central rate—or the maximum and minimum value of the exchange rate may remain within a narrow margin of 2%—for at least three months. The monetary authority stands ready to maintain the fixed parity through direct intervention (i.e., via sale or purchase of foreign exchange in the market) or indirect intervention (e.g., via aggressive use of interest rate policy, imposition of foreign exchange regulations, exercise of moral suasion that constrains foreign exchange activity, or intervention by other public institutions). The flexibility of monetary policy, though limited, is greater than in the case of exchange arrangements with no separate legal tender and currency boards because traditional central banking functions are still possible, and the monetary authority can adjust the level of the exchange rate, although relatively infrequently.
    Pegged exchange rate within horizontal bandsThe value of the currency is maintained within certain margins of fluctuation of at least ±1% around a fixed central rate, or the margin between the maximum and minimum value of the exchange rate exceeds 2%. It also includes arrangements of countries in the ERM of the European Monetary System (EMS), which was replaced with the ERM II on January 1, 1999. There is a limited degree of monetary policy discretion, depending on the width of the band.
    Crawling pegThe currency is adjusted periodically in small amounts at a fixed rate or in response to changes in selective quantitative indicators, such as past inflation differentials vis-à-vis major trading partners or differentials between the inflation target and expected inflation in major trading partners. The rate of crawl can be set to generate inflation-adjusted changes in the exchange rate (backward looking) or set at a predetermined fixed rate and/or below the projected inflation differentials (forward looking). Maintaining a crawling peg imposes constraints on monetary policy in a manner similar to a fixed peg system.
    Crawling bandThe currency is maintained within certain fluctuation margins of at least ±1% around a central rate—or the margin between the maximum and minimum value of the exchange rate exceeds 2%—and the central rate or margin is adjusted periodically at a fixed rate or in response to changes in selective quantitative indicators. The degree of exchange rate flexibility is a function of the width of the band. Bands either are symmetric around a crawling central parity or widen gradually with an asymmetric choice of the crawl of upper and lower bands (in the latter case, there may be no predetermined central rate). The commitment to maintain the exchange rate within the band imposes constraints on monetary policy, with the degree of policy independence being a function of the width of the band.
    Managed floating with no predetermined path for the exchange rateThe monetary authority attempts to influence the exchange rate without having a specific exchange rate path or target. Indicators for managing the rate are broadly judgmental (e.g., balance of payments position, international reserves, parallel market developments), and adjustments may not be automatic. Intervention may be direct or indirect.
    Independently floatingThe exchange rate is market determined, with any official foreign exchange market intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than establishing a level for it.
    Exchange taxForeign exchange transactions are subject to a special tax. Bank commissions charged on foreign exchange transactions are not included in this category; rather, they are listed under the exchange arrangement classification.
    Exchange subsidyForeign exchange transactions are subsidized by using separate, nonmarket exchange rates.
    Forward exchange marketThe existence of a forward exchange market.
    Official cover of forward operationsOfficial coverage of forward operations refers to the situation in which an official entity (the central bank or the government) assumes the exchange risk of certain foreign exchange transactions.
    Arrangements for Payments and Receipts
    Prescription of currency requirementsThe official requirements affecting the selection of currency and the method of settlement for transactions with other countries. When a country has payments agreements with other countries, the terms of these agreements often lead to a prescription of currency for specified categories of payments to, and receipts from, the countries concerned. This category includes information on the use of domestic currency in transactions between residents and nonresidents, both domestically and abroad; it also indicates any restrictions on the use of foreign currency among residents.
    Payments arrangements
    Bilateral payments arrangementsTwo countries have an agreement to prescribe specific rules for payments to each other, including cases in which private parties are also obligated to use specific currencies. These agreements can be either operative or inoperative.
    Regional arrangementsMore than two parties participate in a payments agreement.
    Clearing agreementsThe official bodies of two or more countries agree to offset with some regularity the balances that arise from payments to each other as a result of the exchange of goods, services, or—less often—capital.
    Barter agreements and open accountsThe official bodies of two or more countries agree to offset exports of goods and services to one country with imports of goods and services from the same country, without payment.
    Administration of controlThe authorities’ division of responsibility for monitoring policy, administering exchange controls, and determining the extent of delegation of powers to outside agencies (banks are often authorized to effect foreign exchange transactions).
    Payments arrearsOfficial or private residents of a member country default on their payments or transfers in foreign exchange to nonresidents. This category includes only the situation in which domestic currency is available for residents to settle their debts, but they are unable to obtain foreign exchange—for example, because of the presence of an officially announced or unofficial queuing system; it does not cover nonpayment by private parties owing to bankruptcy of the party concerned.
    Controls on trade in gold (coins and/or bullion)Separate rules for trading in gold domestically and with foreign countries.
    Controls on exports and imports of banknotesRegulations governing the physical movement of means of payment between countries. Where information is available, the category distinguishes between separate limits for the (1) export and import of banknotes by travelers and (2) export and import of banknotes by banks and other authorized financial institutions.
    Resident Accounts
    Indicates whether resident accounts that are maintained in the national currency or in foreign currency, locally or abroad, are allowed and describes how they are treated and the facilities and limitations attached to such accounts. When there is more than one type of resident account, the nature and operation of the various types of accounts are also described; for example, whether residents are allowed to open foreign exchange accounts with or without approval from the exchange control authority, whether these accounts may be held domestically or abroad, and whether the balances on accounts held by residents in domestic currency may be converted into foreign currency.
    Nonresident Accounts
    Indicates whether local nonresident accounts maintained in the national currency or in foreign currency are allowed and describes how they are treated and the facilities and limitations attached to such accounts. When there is more than one type of nonresident account, the nature and operation of the various types of accounts are also described.
    Blocked accountsAccounts of nonresidents, usually in domestic currency. Regulations prohibit or limit the conversion and/or transfer of the balances of such accounts.
    Imports and Import Payments
    Describes the nature and extent of exchange and trade restrictions on imports.
    Foreign exchange budgetInformation on the existence of a foreign exchange plan, i.e., prior allocation of a certain amount of foreign exchange, usually on an annual basis, for the importation of specific types of goods and/or services; in some cases, also differentiating among individual importers.
    Financing requirements for importsInformation on specific import-financing regulations limiting the rights of residents to enter into private contracts in which the financing options differ from those in the official regulations.
    Documentation requirements for release of foreign exchange for imports
    Domiciliation requirementsThe obligation to domicile the transactions with a specified (usually domestic) financial institution.
    Preshipment inspectionMost often a compulsory government measure aimed at establishing the veracity of the import contract in terms of volume, quality, and price.
    Letters of creditParties are obligated to use letters of credit (LCs) as a form of payment for their imports.
    Import licenses used as exchange licensesImport licenses are used not for trade purposes but to restrict the availability of foreign exchange for legitimate trade.
    Import licenses and other nontariff measures
    Positive listA list of goods that may be imported.
    Negative listA list of goods that may not be imported.
    Open general licensesIndicates arrangements whereby certain imports or other international transactions are exempt from the restrictive application of licensing requirements.
    Licenses with quotasRefers to situations in which a license for the importation of a certain good is granted, but a specific limit is imposed on the amount to be imported.
    Other nontariff measuresMay include prohibitions on imports of certain goods from all countries or of all goods from a certain country. Several other nontariff measures are used by countries (e.g., phytosanitary examinations, setting of standards), but these are not covered fully in the report.
    Import taxes and/or tariffsA brief description of the import tax and tariff system, including taxes levied on the foreign exchange made available for imports.
    Taxes collected through the exchange systemIndicates if any taxes apply to the exchange side of an import transaction.
    State import monopolyPrivate parties are not allowed to engage in the importation of certain products, or they are limited in their activity.
    Exports and Export Proceeds
    Describes restrictions on the use of export proceeds, as well as regulations on exports.
    Repatriation requirementsThe obligation of exporters to repatriate export proceeds.
    Surrender requirementsRegulations requiring the recipient of repatriated export proceeds to sell, sometimes at a specified exchange rate, any foreign exchange proceeds in return for local currency to the central bank, commercial banks, foreign exchange markets, or exchange dealers authorized for this purpose.
    Surrender to the central bank
    Surrender to authorized dealers
    Financing requirementsInformation on specific export-financing regulations limiting the rights of residents to enter into private contracts in which the financing options differ from those in the official regulations.
    Documentation requirementsThe same categories as in the case of imports are used.
    Export licensesRestrictions on the right of residents to export goods. These restrictions may take the form of quotas (where a certain quantity of shipment abroad is allowed) or the absence of quotas (where the licenses are issued at the discretion of the foreign trade control authority).
    Export taxesA brief description of the export tax system, including any taxes that are levied on foreign exchange earned by exporters.
    Payments for Invisible Transactions and Current Transfers
    Describes the procedures for effecting payments abroad in connection with current transactions in invisibles, with reference to prior approval requirements, the existence of quantitative and indicative limits, and/or bona fide tests. Detailed information on the most common categories of transactions is provided only when regulations differ for the various categories. Indicative limits establish maximum amounts up to which the purchase of foreign exchange is allowed on declaration of the nature of the transaction, mainly for statistical purposes. Amounts above those limits are granted if the bona fide nature of the transaction is established by the presentation of appropriate documentation. Bona fide tests also may be applied to transactions for which quantitative limits have not been established.
    Trade-related paymentsIncludes freight and insurance (including possible regulations on non-trade- related insurance payments and transfers), unloading and storage costs, administrative expenses, commissions, and customs duties and fees.
    Investment-related paymentsIncludes profits and dividends, interest payments (including interest on debentures, mortgages, etc.), amortization of loans or depreciation of foreign direct investments, and payments and transfers of rent.
    Payments for travelIncludes international travel for business, tourism, etc.
    Personal paymentsIncludes medical expenditures abroad, study expenses abroad, pensions (including regulations on payments and transfers of pensions by both state and private pension providers on behalf of nonresidents, as well as the transfer of pensions due to residents living abroad), and family maintenance and alimony (including regulations on payments and transfers abroad of family maintenance and alimony by residents).
    Foreign workers’ wagesTransfer abroad of earnings by nonresidents working in the country.
    Credit card use abroadUse of credit and debit cards to pay for invisible transactions.
    Other paymentsIncludes subscription and membership fees, authors’ royalties, consulting and legal fees, etc.
    Proceeds from Invisible Transactions and Current Transfers
    Describes regulations governing exchange receipts derived from transactions in invisibles—including descriptions of any limitations on their conversion into domestic currency—and the use of those receipts.
    Repatriation requirementsThe definitions of repatriation and surrender requirements are similar to those applied to export proceeds.
    Surrender requirements
    Surrender to the central bank
    Surrender to authorized dealers
    Restrictions on use of fundsRefers mainly to the limitations imposed on the use of receipts previously deposited in certain types of bank accounts.
    Capital Transactions
    Describes regulations influencing both inward and outward capital flows. The concept of controls on capital transactions is interpreted broadly. Thus, controls on capital transactions include prohibitions; need for prior approval, authorization, and notification; dual and multiple exchange rates; discriminatory taxes; and reserve requirements or interest penalties imposed by the authorities that regulate the conclusion or execution of transactions or transfers; or the holding of assets at home by nonresidents and abroad by residents. The coverage of the regulations applies to receipts as well as to payments and to actions initiated by nonresidents and residents. In addition, because of the close association with capital transactions, information is also provided on local financial operations conducted in foreign currency, describing specific regulations in force that limit residents’ and nonresidents’ issuing of securities denominated in foreign currency or, generally, limitations on contract agreements expressed in foreign exchange.
    Repatriation requirementsThe definitions of repatriation and surrender requirements are similar to those applied to export proceeds.
    Surrender requirements
    Surrender to the central bank
    Surrender to authorized dealers
    Controls on capital and money market instrumentsRefers to public offerings or private placements on primary markets or their listing on secondary markets.
    On capital market securitiesRefers to shares and other securities of a participating nature, and bonds and other securities with an original maturity of more than one year.
    Shares or other securities of a participating natureIncludes transactions involving shares and other securities of a participating nature if they are not effected for the purpose of acquiring a lasting economic interest in the management of the enterprise concerned. Investments for the purpose of acquiring a lasting economic interest are addressed under foreign direct investments.
    Bonds or other debt securitiesRefers to bonds and other securities with an original maturity of more than one year. The term “other securities” includes notes and debentures.
    On money market instrumentsRefers to securities with an original maturity of one year or less and includes short-term instruments, such as certificates of deposit and bills of exchange. The category also includes treasury bills and other short-term government paper, bankers’ acceptances, commercial papers, interbank deposits, and repurchase agreements.
    On collective investment securitiesIncludes share certificates and registry entries or other evidence of investor interest in an institution for collective investment, such as mutual funds, and unit and investment trusts.
    Controls on derivatives and other instrumentsRefers to operations in other negotiable instruments and nonsecured claims not covered under the above subsections. These may include operations in rights; warrants; financial options and futures; secondary market operations in other financial claims (including sovereign loans, mortgage loans, commercial credits, negotiable instruments originating as loans, receivables, and discounted bills of trade); forward operations (including those in foreign exchange); swaps of bonds and other debt securities; credits and loans; and other swaps (e.g., interest rate, debt/equity, equity/debt, foreign currency, as well as swaps of any of the instruments listed above). Controls on operations in foreign exchange without any other underlying transaction (spot or forward trading on the foreign exchange markets, forward cover operations, etc.) are also included.
    Controls on credit operations
    Commercial creditsCovers operations directly linked with international trade transactions or with the rendering of international services.
    Financial creditsIncludes credits other than commercial credits granted by all residents, including banks, to nonresidents, or vice versa.
    Guarantees, sureties, and financial backup facilitiesIncludes guarantees, sureties, and financial backup facilities provided by residents to nonresidents and vice versa. It also includes securities pledged for payment or performance of a contract—such as warrants, performance bonds, and standby letters of credit—and financial backup facilities that are credit facilities used as a guarantee for independent financial operations.
    Controls on direct investmentRefers to investments for the purpose of establishing lasting economic relations both abroad by residents and domestically by nonresidents. These investments are essentially for the purpose of producing goods and services, and, in particular, investments that allow investor participation in the management of the enterprise. The category includes the creation or extension of a wholly owned enterprise, subsidiary, or branch and the acquisition of full or partial ownership of a new or existing enterprise that results in effective influence over the operations of the enterprise.
    Controls on liquidation of direct investmentRefers to the transfer of principal, including the initial capital and capital gains, of a foreign direct investment as defined above.
    Controls on real estate transactionsRefers to the acquisition of real estate not associated with direct investment, including, for example, investments of a purely financial nature in real estate or the acquisition of real estate for personal use.
    Controls on personal capital transactionsCovers transfers initiated on behalf of private persons and intended to benefit other private persons. It includes transactions involving property to which the promise of a return to the owner with payments of interest is attached (e.g., loans or settlements of debt in their country of origin by immigrants), and transfers effected free of charge to the beneficiary (e.g., gifts and endowments, loans, inheritances and legacies, or emigrants’ assets).
    Provisions specific to the financial sector
    Provisions specific to commercial banks and other credit institutionsDescribes regulations that are specific to these institutions, such as monetary, prudential, and foreign exchange controls. Inclusion of an entry in this category does not necessarily signify that the aim of the measure is to control the flow of capital. Some of these items (e.g., borrowing abroad, lending to nonresidents, purchase of locally issued securities denominated in foreign exchange, investment regulations) may be repetitions of the entries under respective categories of controls on capital and money market instruments, on credit operations, or on direct investments, when the same regulations apply to commercial banks as well as to other residents.
    Open foreign exchange position limitsDescribes regulations on certain commercial bank balance sheet items (including capital) and on limits covering commercial banks’ positions in foreign currencies (including gold).
    Provisions specific to institutional investorsDescribes controls specific to institutions, such as insurance companies, pension funds, investment firms (including brokers, dealers, or advisory firms), and other securities firms (including collective investment funds). Incorporates measures that impose limitations on the composition of the institutional investors’ foreign or foreign currency assets (reserves, accounts) and liabilities (e.g., investments in equity capital of institutional investors or borrowing from nonresidents) and/or that differentiate between residents and nonresidents. Examples of such controls are restrictions on investments because of rules regarding the technical, mathematical, security, or mandatory reserves; solvency margins; premium reserve stocks; or guarantee funds of nonbank financial institutions. Inclusion of an entry in this category does not necessarily signify that the aim of the measure is to control the flow of capital.
    Insurance companies
    Pension funds
    Investment firms and collective investment funds

    The exchange arrangements and exchange restrictions database includes all measures in this report.

    Listing conventions used in the report are as follows:

    • When it is unclear whether a particular category or measure exists—because pertinent information is not available at the time of publication—the category is displayed with the notation “n.a.”

    • If a measure is known to exist but specific information on it is not available, the category is displayed with the notation “yes.”

    • When information is available on all but a particular item or items within a category, these items are not included in the table.

    • In cases where members have provided the IMF staff with information indicating that a category or an item is not regulated, these are marked by “n.r.”

    • When relevant documents have not been published and the authorities have not consented to the publication of the information as included in the staff report, the text reads: “Information is not publicly available.”

    Summary Features of Exchange Arrangements and Regulatory Frameworks for Current and Capital Transactions in Member Countries

    (As of date shown on first country page)1

    Total number of member countries with this featureAfghanistan, I.R. ofAlbaniaAlgeriaAngolaAntigua and BarbudaArgentinaArmeniaAustraliaAustriaAzerbaijan, Republic ofThe BahamasBahrain, Kingdom ofBangladeshBarbadosBelarusBelgiumBelizeBeninBhutanBoliviaBosnia and HerzegovinaBotswana
    Status under IMF Articles of Agreement
    Article VIII166
    Article XIV19
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender10
    Currency board arrangement12
    Conventional pegged arrangement68+
    Pegged exchange rate within horizontal bands5
    Crawling peg6*
    Crawling band1
    Managed floating with no predetermined path for the exchange rate48
    Independently floating35
    Exchange rate structure
    Dual exchange rates9
    Multiple exchange rates4
    Arrangements for payments and receipts
    Bilateral payments arrangements64
    Payments arrears46
    Controls on payments for invisible transactions and current transfers90
    Proceeds from exports and/or invisible transactions
    Repatriation requirements89
    Surrender requirements61
    Capital transactions
    Controls on:
    Capital market securities135
    Money market instruments113
    Collective investment securities111
    Derivatives and other instruments93
    Commercial credits93
    Financial credits121
    Guarantees, sureties, and financial backup facilities79
    Direct investment147
    Liquidation of direct investment48
    Real estate transactions140
    Personal capital transactions92
    Provisions specific to:
    Commercial banks and other credit institutions159
    Institutional investors113
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    Usually December 31, 2006.

    BrazilBrunei DarussalamBulgariaBurkina FasoBurundiCambodiaCameroonCanadaCape VerdeCentral African RepublicChadChileChina, People’s Rep. ofColombiaComorosCongo, Dem. Rep. ofCongo, Republic ofCosta RicaCôte d’IvoireCroatiaCyprusCzech RepublicDenmarkDjiboutiDominicaDominican Republic
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender
    Currency board arrangement+
    Conventional pegged arrangement
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange rate structure
    Dual exchange rates
    Multiple exchange rates
    Arrangements for payments and receipts
    Bilateral payments arrangements
    Payments arrears
    Controls on payments for invisible transactions and current transfers
    Proceeds from exports and/or invisible transactions
    Repatriation requirements
    Surrender requirements
    Capital transactions
    Controls on:
    Capital market securities
    Money market instruments
    Collective investment securities
    Derivatives and other instruments
    Commercial credits
    Financial credits
    Guarantees, sureties, and financial backup facilities
    Direct investment
    Liquidation of direct investment
    Real estate transactions
    Personal capital transactions
    Provisions specific to:
    Commercial banks and other credit institutions
    Institutional investors
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    *

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    EcuadorEgyptEl SalvadorEquatorial GuineaEritreaEstoniaEthiopiaFijiFinlandFranceGabonGambia, TheGeorgiaGermanyGhanaGreeceGrenadaGuatemalaGuineaGuinea-BissauGuyanaHaitiHonduras
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender
    Currency board arrangement
    Conventional pegged arrangement*
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange rate structure
    Dual exchange rates
    Multiple exchange rates
    Arrangements for payments and receipts
    Bilateral payments arrangements
    Payments arrears
    Controls on payments for invisible transactions and current transfers
    Proceeds from exports and/or invisible transactions
    Repatriation requirements
    Surrender requirements
    Capital transactions
    Controls on:
    Capital market securities
    Money market instruments
    Collective investment securities
    Derivatives and other instruments
    Commercial credits
    Financial credits
    Guarantees, sureties, and financial backup facilities
    Direct investment
    Liquidation of direct investment
    Real estate transactions
    Personal capital transactions
    Provisions specific to:
    Commercial banks and other credit institutions
    Institutional investors
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    +

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    HungaryIcelandIndiaIndonesiaIran, I.R. ofIraqIrelandIsraelItalyJamaicaJapanJordanKazakhstanKenyaKiribatiKorea, Republic ofKuwaitKyrgyz RepublicLao People’s Dem. Rep.LatviaLebanonLesothoLiberiaLibyan Arab Jamahiriya
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender+
    Currency board arrangement
    Conventional pegged arrangement*+
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange rate structure
    Dual exchange rates
    Multiple exchange rates
    Arrangements for payments and receipts
    Bilateral payments arrangements
    Payments arrears
    Controls on payments for invisible transactions and current transfers
    Proceeds from exports and/or invisible transactions
    Repatriation requirements
    Surrender requirements
    Capital transactions
    Controls on:
    Capital market securities
    Money market instruments
    Collective investment securities
    Derivatives and other instruments
    Commercial credits
    Financial credits
    Guarantees, sureties, and financial backup facilities
    Direct investment
    Liquidation of direct investment
    Real estate transactions
    Personal capital transactions
    Provisions specific to:
    Commercial banks and other credit institutions
    Institutional investors
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    LithuaniaLuxembourgMacedonia, fmr. Yugoslav Rep.MadagascarMalawiMalaysiaMaldivesMaliMaltaMarshall Islands, Rep. of theMauritaniaMauritiusMexicoMicronesia, Fed. States ofMoldovaMongoliaMontenegro, Rep. ofMoroccoMozambiqueMyanmarNamibiaNepal
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender
    Currency board arrangement
    Conventional pegged arrangement*++
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange rate structure
    Dual exchange rates
    Multiple exchange rates
    Arrangements for payments and receipts
    Bilateral payments arrangements
    Payments arrears
    Controls on payments for invisible transactions and current transfers
    Proceeds from exports and/or invisible transactions
    Repatriation requirements
    Surrender requirements
    Capital transactions
    Controls on:
    Capital market securities
    Money market instruments
    Collective investment securities
    Derivatives and other instruments
    Commercial credits
    Financial credits
    Guarantees, sureties, and financial backup facilities
    Direct investment
    Liquidation of direct investment
    Real estate transactions
    Personal capital transactions
    Provisions specific to:
    Commercial banks and other credit institutions
    Institutional investors
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    NetherlandsNew ZealandNicaraguaNigerNigeriaNorwayOmanPakistanPalauPanamaPapua New GuineaParaguayPeruPhilippinesPolandPortugalQatarRomaniaRussian FederationRwandaSt. Kitts and NevisSt. LuciaSt. Vincent and the GrenadinesSamoaSan Marino
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender
    Currency board arrangement
    Conventional pegged arrangement*
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange rate structure
    Dual exchange rates
    Multiple exchange rates
    Arrangements for payments and receipts
    Bilateral payments arrangements
    Payments arrears
    Controls on payments for invisible transactions and current transfers
    Proceeds from exports and/or invisible transactions
    Repatriation requirements
    Surrender requirements
    Capital transactions
    Controls on:
    Capital market securities
    Money market instruments
    Collective investment securities
    Derivatives and other instruments
    Commercial credits
    Financial credits
    Guarantees, sureties, and financial backup facilities
    Direct investment
    Liquidation of direct investment
    Real estate transactions
    Personal capital movements
    Provisions specific to:
    Commercial banks and other credit institutions
    Institutional investors
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    +

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    São Tomé and PríncipeSaudi ArabiaSenegalSerbia, Rep. ofSeychellesSierra LeoneSingaporeSlovak RepublSloveniaSolomon IslandsSomaliaSouth AfricaSpainSri LankaSudanSurinameSwazilandSwedenSwitzerlandSyrian Arab RepublicTajikistanTanzaniaThailandTimor-Leste, Dem. Rep. of
    Status under IMF Articles of Agreement
    Article VIII
    Article XIV
    Exchange rate arrangements
    Exchange arrangement with no separate legal tender
    Currency board arrangement
    Conventional pegged arrangement*+
    Pegged exchange rate within horizontal bands
    Crawling peg
    Crawling band
    Managed floating with no predetermined path for the exchange rate
    Independently floating
    Exchange rate structure
    Dual exchange rates
    Multiple exchange rates
    Arrangements for payments and receipts
    Bilateral payments arrangements
    Payments arrears
    Controls on payments for invisible transactions and current transfers
    Proceeds from exports and/or invisible transactions
    Repatriation requirements
    Surrender requirements
    Capital transactions
    Controls on:
    Capital market securities
    Money market instruments
    Collective investment securities
    Derivatives and other instruments
    Commercial credits
    Financial credits
    Guarantees, sureties, and financial backup facilities
    Direct investment
    Liquidation of direct investment
    Real estate transactions
    Personal capital movements
    Provisions specific to:
    Commercial banks and other credit institutions
    Institutional investors
    For key and footnote, see page liii.Key and Footnote

    Indicates that the specified practice is a feature of the exchange system.

    Indicates that data were not available at time of publication.

    Indicates that the specific practice is not regulated.

    Indicates that member uses the currency of another member as legal tender.

    Indicates that the member participates in the euro area.

    Indicates that the country participates in the ERM II.

    Indicates that flexibility is limited vis‐à‐vis the U.S. dollar.

    Indicates that flexibility is limited vis‐à‐vis the euro.

    Indicates that flexibility is limited vis‐vis another single currency.

    Indicates that flexibility is limited vis‐à‐vis the SDR.

    Indicates that flexibility is limited vis‐à‐vis another basket of currencies.

    TogoTongaTrinidad and TobagoTunisiaTurkeyTurkmenistanUgandaUkraineUnited Arab EmiratesUnited KingdomUnited StatesUruguayUzbekistanVanuatuVenezuela, Rep. Bolivariana deVietnamYemen, Republic ofZambiaZimbabweMemorandum: NonmembersArubaChina, P.R.: Hong Kong SARNetherlands Antilles
    Status under IMF Articles of Agreement
    Article VIII