Abstract

The twelve months under review in this Report have shown no general trend toward the relaxation of exchange restrictions. No member of the Fund which originally availed itself of the provisions of Article XIV, Section 2, of the Fund Agreement, permitting exchange restrictions in the transitional period, has subsequently felt itself able to renounce the rights provided in this Section. El Salvador, Guatemala, Mexico, Panama, and the United States are still the only members who have accepted in full the general obligation to avoid restrictions on current payments and discriminatory currency practices. In a few other countries, such as Cuba and Venezuela, the retention of transitional period rights has little significant effect upon the flow of trade. The Fund has not yet deemed that circumstances justified a suggestion to any member that these rights should be renounced. Other countries have, however, relaxed certain restrictions. For example, the United Kingdom extended the scope of “administrative transferability” of sterling held in nonresident accounts; several countries increased the amounts of foreign exchange granted to residents for tourist expenditure; and exchange restrictions in connection with bank notes were relaxed in Belgium, the Netherlands, and France. Furthermore, Belgium allowed increased utilization of certain restricted accounts held by residents of the United States and Switzerland. Balances in these accounts outstanding as of March 1, 1949 were made available for all payments to Belgian residents, including payments for exports. These rights were later extended to accounts held by residents of other countries. In Italy, facilities were introduced to provide for the free transfer abroad, within certain limits, of amortization payments and earnings in respect of foreign investments made with convertible exchange. In French Somaliland, restrictions were eliminated as part of the institution of a new monetary system mentioned in Appendix II. These changes, however, are not significant enough to indicate any general trend.