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Abstract
The IMF has played an important advisory and technical role in the selection of appropriate exchange rate regimes, including helping to develop foreign exchange markets. In the 1980s, this role centered on assistance to develop the role of floating exchange rates, responding to widespread shortages of reserves and large disequilibria associated with the debt crisis. IMF missions, including a number from the former Exchange and Trade Relations Department that were fielded for this purpose,69 advised on operational aspects of setting up interbank and auction foreign exchange markets and associated macroeconomic policy steps, including unification of multiple exchange rates, liberalization of exchange and trade restrictions, foreign exchange intervention policies, and implications for the conduct of monetary policy. At a later stage of development of spot exchange markets, advice was also given on measures to develop forward foreign exchange markets.
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