Abstract

For the purposes of some treaties, it is necessary to measure changes in exchange rates. Under the original Articles of the IMF, for example, the IMF’s reaction to a proposed change in the par value of a member’s currency depended on whether the change, together with all previous changes, did not exceed 10 percent, a further 10 percent, or an amount beyond 20 percent, of the initial par value. The changes were cumulative, in the sense that all changes, whether upward or downward, went into the calculation as a gross and not a net amount.1 While the par value system was in operation, there was no difficulty in measuring individual devaluations or revaluations, or total changes, because there was a common denominator in terms of which these changes were calculated.