Book
Share
Back Matter

Back Matter

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2014
    Share
    • ShareShare
    Show Summary Details

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

    (As of date shown on first page of country chapter; symbol key at end of table)

    Country Table Matrix

    Status under IMF Articles of Agreement

    Date of membership

    Article VIII

    Article XIV

    Exchange Measures

    Restrictions and/or multiple currency practices

    Exchange measures imposed for security reasons

    In accordance with IMF Executive Board Decision No. 144-(52/51)

    Other security restrictions

    References to legal instruments and hyperlinks

    Exchange Arrangement

    Currency

    Other legal tender

    Exchange rate structure

    Unitary

    Dual

    Multiple

    Classification

    No separate legal tender

    Currency board

    Conventional peg

    Stabilized arrangement

    Crawling peg

    Crawl-like arrangement

    Pegged exchange rate within horizontal bands

    Other managed arrangement

    Floating

    Free floating

    Official exchange rate

    Monetary policy framework

    Exchange rate anchor

    Monetary aggregate target

    Inflation-targeting framework

    Other monetary framework

    Exchange tax

    Exchange subsidy

    Foreign exchange market

    Spot exchange market

    • Operated by the central bank

      • Foreign exchange standing facility

      • Allocation

      • Auction

      • Fixing

    • Interbank market

      • Over the counter

      • Brokerage

      • Market making

    • Forward exchange market

      • Official cover of forward operations

    References to legal instruments and hyperlinks

    Arrangements for Payments and Receipts

    • Prescription of currency requirements

    • Controls on the use of domestic currency

      • For current transactions and payments

      • For capital transactions

        • Transactions in capital and money market instruments

        • Transactions in derivatives and other instruments

        • Credit operations

    • Use of foreign exchange among residents

    • Payments arrangements

    • Bilateral payments arrangements

      • Operative

      • Inoperative

    • Regional arrangements

    • Clearing agreements

    • Barter agreements and open accounts

    • Administration of control

    • Payments arrears

    • Official

    • Private

    • Controls on trade in gold (coins and/or bullion)

    • On domestic ownership and/or trade

    • On external trade

    • Controls on exports and imports of banknotes

    • On exports

      • Domestic currency

      • Foreign currency

    • On imports

      • Domestic currency

      • Foreign currency

    • References to legal instruments and hyperlinks

    Resident Accounts

    • Foreign exchange accounts permitted

    • Held domestically

      • Approval required

    • Held abroad

      • Approval required

    • Accounts in domestic currency held abroad

    • Accounts in domestic currency convertible into foreign currency

    • References to legal instruments and hyperlinks

    Nonresident Accounts

    • Foreign exchange accounts permitted

    • Approval required

    • Domestic currency accounts

    • Convertible into foreign currency

    • Approval required

    • Blocked accounts

    • References to legal instruments and hyperlinks

    Imports and Import Payments

    • Foreign exchange budget

    • Financing requirements for imports

    • Minimum financing requirements

    • Advance payment requirements

    • Advance import deposits

    • Documentation requirements for release of foreign exchange for imports

    • Domiciliation requirements

    • Preshipment inspection

    • Letters of credit

    • Import licenses used as exchange licenses

    • Other

    • Import licenses and other nontariff measures

    • Positive list

    • Negative list

    • Open general licenses

    • Licenses with quotas

    • Other nontariff measures

    • Import taxes and/or tariffs

    • Taxes collected through the exchange system

    • State import monopoly

    • References to legal instruments and hyperlinks

    Exports and Export Proceeds

    • Repatriation requirements

    • Surrender requirements

      • Surrender to the central bank

      • Surrender to authorized dealers

    • Financing requirements

    • Documentation requirements

    • Letters of credit

    • Guarantees

    • Domiciliation

    • Preshipment inspection

    • Other

    • Export licenses

    • Without quotas

    • With quotas

    • Export taxes

    • Collected through the exchange system

    • Other export taxes

    • References to legal instruments and hyperlinks

    Payments for Invisible Transactions and Current Transfers

    • Controls on these transfers

    • Trade-related payments

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • Investment-related payments

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • Payments for travel

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • Personal payments

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • Foreign workers' wages

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • Credit card use abroad

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • Other payments

      • Prior approval

      • Quantitative limits

      • Indicative limits/bona fide test

    • References to legal instruments and hyperlinks

    Proceeds from Invisible Transactions and Current Transfers

    • Repatriation requirements

    • Surrender requirements

      • Surrender to the central bank

      • Surrender to authorized dealers

    • Restrictions on use of funds

    • References to legal instruments and hyperlinks

    Capital Transactions

    • Controls on capital transactions

    • Repatriation requirements

      • Surrender requirements

        • Surrender to the central bank

        • Surrender to authorized dealers

    • Controls on capital and money market instruments

      • On capital market securities

        • Shares or other securities of a participating nature

          • Purchase locally by nonresidents

          • Sale or issue locally by nonresidents

          • Purchase abroad by residents

          • Sale or issue abroad by residents

        • Bonds or other debt securities

          • Purchase locally by nonresidents

          • Sale or issue locally by nonresidents

          • Purchase abroad by residents

          • Sale or issue abroad by residents

        • On money market instruments

          • Purchase locally by nonresidents

          • Sale or issue locally by nonresidents

          • Purchase abroad by residents

          • Sale or issue abroad by residents

        • On collective investment securities

          • Purchase locally by nonresidents

          • Sale or issue locally by nonresidents

          • Purchase abroad by residents

          • Sale or issue abroad by residents

        • Controls on derivatives and other instruments

          • Purchase locally by nonresidents

          • Sale or issue locally by nonresidents

          • Purchase abroad by residents

          • Sale or issue abroad by residents

      • Controls on credit operations

        • Commercial credits

          • By residents to nonresidents

          • To residents from nonresidents

        • Financial credits

          • By residents to nonresidents

          • To residents from nonresidents

        • Guarantees, sureties, and financial backup facilities

          • By residents to nonresidents

          • To residents from nonresidents

      • Controls on direct investment

        • Outward direct investment

        • Inward direct investment

      • Controls on liquidation of direct investment

      • Controls on real estate transactions

        • Purchase abroad by residents

        • Purchase locally by nonresidents

        • Sale locally by nonresidents

      • Controls on personal capital transactions

        • Loans

          • By residents to nonresidents

          • To residents from nonresidents

        • Gifts, endowments, inheritances, and legacies

          • By residents to nonresidents

          • To residents from nonresidents

        • Settlement of debts abroad by immigrants

        • Transfer of assets

          • Transfer abroad by emigrants

          • Transfer into the country by immigrants

        • Transfer of gambling and prize earnings

      • References to legal instruments and hyperlinks

    Provisions Specific to the Financial Sector

    • Provisions specific to commercial banks and other credit institutions

    • Borrowing abroad

    • Maintenance of accounts abroad

    • Lending to nonresidents (financial or commercial credits)

    • Lending locally in foreign exchange

    • Purchase of locally issued securities denominated in foreign exchange

    • Differential treatment of deposit accounts in foreign exchange

      • Reserve requirements

      • Liquid asset requirements

      • Interest rate controls

      • Credit controls

    • Differential treatment of deposit accounts held by nonresidents

      • Reserve requirements

      • Liquid asset requirements

      • Interest rate controls

      • Credit controls

    • Investment regulations

      • Abroad by banks

      • In banks by nonresidents

    • Open foreign exchange position limits

      • On resident assets and liabilities

      • On nonresident assets and liabilities

    • Provisions specific to institutional investors

    • Insurance companies

      • Limits (max.) on securities issued by nonresidents

      • Limits (max.) on investment portfolio held abroad

      • Limits (min.) on investment portfolio held locally

      • Currency-matching regulations on assets/liabilities composition

    • Pension funds

      • Limits (max.) on securities issued by nonresidents

      • Limits (max.) on investment portfolio held abroad

      • Limits (min.) on investment portfolio held locally

      • Currency-matching regulations on assets/liabilities composition

    • Investment firms and collective investment funds

      • Limits (max.) on securities issued by nonresidents

      • Limits (max.) on investment portfolio held abroad

      • Limits (min.) on investment portfolio held locally

      • Currency-matching regulations on assets/liabilities composition

    • References to legal instruments and hyperlinks

    Changes during 2013

    • Status under IMF Articles of Agreement

    • Exchange measures

    • Exchange arrangement

    • Arrangements for payments and receipts

    • Resident accounts

    • Nonresident accounts

    • Imports and import payments

    • Exports and export proceeds

    • Payments for invisible transactions and current transfers

    • Proceeds from invisible transactions and current transfers

    • Capital transactions

    • Repatriation and surrender requirements

    • Controls on capital and money market instruments

    • Controls on derivatives and other instruments

    • Controls on credit operations

    • Controls on direct investment

    • Controls on liquidation of direct investment

    • Controls on real estate transactions

    • Controls on personal capital transactions

    • Provisions specific to the financial sector

    • Provisions specific to commercial banks and other credit institutions

    • Provisions specific to institutional investors

    Changes during 2014

    • Status under IMF Articles of Agreement

    • Exchange measures

    • Exchange arrangement

    • Arrangements for payments and receipts

    • Resident accounts

    • Nonresident accounts

    • Imports and import payments

    • Exports and export proceeds

    • Payments for invisible transactions and current transfers

    • Proceeds from invisible transactions and current transfers

    • Capital transactions

    • Repatriation and surrender requirements

    • Controls on capital and money market instruments

    • Controls on derivatives and other instruments

    • Controls on credit operations

    • Controls on direct investment

    • Controls on liquidation of direct investment

    • Controls on real estate transactions

    • Controls on personal capital transactions

    • Provisions specific to the financial sector

    • Provisions specific to commercial banks and other credit institutions

    • Provisions specific to institutional investors

    These chapters are available on AREAER Online (www.elibrary-areaer.imf.org/). 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.

    In addition to the 188 IMF member countries, the report includes information on Hong Kong SAR (China) as well as Aruba and Curaçao and Sint Maarten (all in the Kingdom of the Netherlands).

    The IMF Articles of Agreement are available at www.imf.org/external/pubs/ft/aa/index.htm.

    The information on restrictions and MCPs consists of verbatim quotes from each country’s most recent published IMF staff report as of December 31, 2013, and represents the views of the IMF staff, which may not necessarily have been endorsed by the IMF Executive Board. In cases in which the information is drawn from IMF staff reports that have not been made public, the quotes have been included with the express consent of the member country. In the absence of such consent, the relevant information is reported as “not publicly available.” Any changes to these restrictions and MCPs implemented after the relevant IMF report has been issued will be reflected in the subsequent issue of the AREAER that covers the year during which the IMF staff report with information on such changes is issued.

    The information on exchange measures imposed for security reasons is based solely on information provided by country authorities.

    The date of the latest reported development is indicated for each country in the country chapters.

    Monetary anchors are defined as the main intermediate target the authorities pursue to achieve their policy goal, which, overwhelmingly, is price stability. The inventory of monetary anchors is based mainly on members’ declarations in the context of the yearly AREAER update or Article IV consultations. For the 2010 reporting year, country officials were asked for the first time to report specific information about the monetary policy framework, and as a result, the information provided by officials improved considerably.

    The officially announced monetary anchor may differ from the anchor implemented in practice, as a result of the de facto exchange rate arrangement.

    Inflation targeting aims to address the problem of exchange rates and monetary aggregates that do not have stable relationships with prices, making intermediate targets less suitable for inflation control.

    The Central Bank of the Russian Federation (Bank of Russia) has taken preliminary steps toward a free-floating exchange rate regime.

    Preannounced programs of purchases or sales of foreign exchange typically do not qualify as interventions because the design of these programs minimizes the impact on the exchange rate. Very small, retail-type transactions are also disregarded.

    Underlying data for this section also cover exchange measures implemented in countries whose information is not publicly available in the AREAER database except measures included in Table 10.

    The AREAER does not indicate whether the IMF has approved such measures.

    The member countries that avail themselves of the transitional arrangements under Article XIV are Afghanistan, Albania, Angola, Bhutan, Bosnia and Herzegovina, Burundi, Eritrea, Ethiopia, Iraq, Kosovo, Liberia, Maldives, Myanmar, Nigeria, São Tomé and Príncipe, Somalia, South Sudan, Syria, Turkmenistan, and Tuvalu.

    See Decision No. 144-(52/51) in Selected Decisions and Selected Documents of the International Monetary Fund, Issue 36 (Washington: IMF, 2012).

    Both these periods reflect a large number of changes reported by Cyprus. Cyprus, to deal with its economic crisis, imposed wide-ranging restrictions in March 2013 that significantly constrained capital transactions across many categories. Subsequently, as conditions improved, restrictions were gradually eased starting as early as April 2013. The AREAER records the imposition of these restrictions and their step-by-step removal across many categories of transactions, thereby showing a large number of measures taken by Cyprus.

    CFMs encompass a broad spectrum of measures. For the purposes of the IMF’s institutional view, the term “capital flow management measures” refers to measures designed to limit capital flows. CFMs comprise residency-based CFMs, which encompass a variety of measures (including taxes and regulations) affecting cross-border financial activity that discriminate on the basis of residency–also generally referred to as capital controls–and other CFMs, which do not discriminate on the basis of residency but are nonetheless designed to limit capital flows. These other CFMs typically include measures, such as some prudential measures, that differentiate transactions on the basis of currency as well as other measures that typically apply to the nonfinancial sector. The concept of capital controls in the AREAER is quite similar to that of the CFM: it encompasses regulations that limit capital flows and includes various measures that regulate the conclusion or execution of transactions and transfers and the holding of assets at home by nonresidents and abroad by residents. See “The Liberalization and Management of Capital Flows: An Institutional View” (Washington: IMF, 2012).

    Capital controls and prudential measures are highly intertwined because of their overlapping application. For example, some prudential measures (such as different reserve requirements for deposit accounts held by residents and nonresidents) could also be regarded as capital controls because they distinguish between transactions with residents and nonresidents and hence influence capital flows.

    Inclusion of an entry in this category does not necessarily indicate that the aim of the measure is to control the flow of capital.

    Regulation (EU) No. 575/2013 (Capital Requirements Regulation) and Directive No. EU/2013/36 (Capital Requirements Directive IV).

    Reserve requirements imposed at different levels or under different conditions for liabilities to residents and nonresidents are considered capital controls.

    Peru first gradually increased and later decreased its multicomponent reserve requirements in 35 steps, and in addition to gradually increasing maturity-dependent required reserves on foreign exchange liabilities, Turkey introduced a reserve option mechanism, under which a gradually increasing share of required reserves on lira liabilities may be held in foreign currency and gold. The new regime was implemented in several steps, which increased the number of changes significantly.

    Depending on the policy objective, reserve requirement ratios are often differentiated according to maturity, the denomination of the liability, or the residency of the depositor or lender. (The latter are considered capital controls.)

    Asymmetric open foreign exchange position limits are often considered capital controls because they have the effect of influencing capital flows.

    Using gross and net capital flow data for the period 1980–2011 for a sample of 147 advanced, emerging market, and developing economies, Bluedorn and others (2013) find that private capital flows have been typically volatile for all countries, but the volatility has perhaps been most notable for emerging market and developing economies. A study by the IMF (2011) identifies frequent capital inflow surges (a quarter or year in which gross inflows exceeded the long-term average and were larger than 1.5 percent of GDP), episodes (a string of surges), and waves (a large number of simultaneous country episodes) among 48 emerging market and developing economies from 1990 through 2010. Surges occurred 20 percent of the time; episodes arose in 158 cases; and waves arrived three times. Forbes and Warnock (2012b) identify 167 surges, 221 stops, 196 flights, and 214 retrenchments based on gross flows between 1980 and 2009 in a sample of 58 countries from all income groups. Ghosh and others (2014) identify more than 300 episodes of surges in net flows to emerging markets over the past decades.

    Openness is defined as a large supply of tradable goods that exceeds domestic demand.

    The unconditional probability of a crisis at any point in time under the same specification is only 5 percent for a banking crisis and 4 percent for a currency crisis. The estimated probabilities of a banking or currency crisis two years after the end of a bonanza are about 9 percent and 6.5 percent, respectively.

    The study covers 112 advanced, emerging market, and developing economies from 1970 to 2007. Institutional quality is measured using the Worldwide Governance Indicators, which capture perceptions of a government’s ability to formulate and implement sound policies and regulations that permit and promote private sector development.

    MPMs are prudential tools that are primarily designed to limit systemic financial risk and maintain financial system stability. While CFMs aim to contain the scale or influence the composition of capital flows, MPMs seek to contain the buildup of systemic financial risks, irrespective of whether the origin of the risk is domestic or cross border.

      You are not logged in and do not have access to this content. Please login or, to subscribe to IMF eLibrary, please click here

      Other Resources Citing This Publication