This paper presents Selected Decisions and Selected Documents’ Third Issue of the IMF. Dealings in paper money and coins are deemed to be ‘other exchange transactions’ within the meaning of Article IV, Section 3, whether or not the importation and exportation of such money and coins to and from the country of origin are subject to restrictions. The IMF does not object to exchange rates which are within 2 percent of parity for spot exchange transactions between a member's currency and the currencies of other members taking place within the member's territories, whenever such rates result from the maintenance of margins of no more than 1 percent from parity for a convertible, including externally convertible, currency. The Executive Directors interpret the Articles of Agreement to mean that steps which are necessary to protect a member from unemployment of a chronic or persistent character, arising from pressure on its balance of payments, are among the measures necessary to correct a fundamental disequilibrium; and that in each instance in which a member proposes a change in the par value of its currency to correct a fundamental disequilibrium the IMF will be required to determine, in the light of all relevant circumstances, whether in its opinion the proposed change is necessary to correct the fundamental disequilibrium.
This paper analyses several IMF’s selected decisions of the Executive Board and selected documents. Each member shall furnish to the IMF the data necessary to determine its net official holdings of gold and United States dollars. The usability of gold or dollars for the payment of the gold subscription is not necessary to constitute “holdings.” It has been decided to recommend to the Board of Governors, where a member presents, for reasons which it shall submit to the IMF, that its reserves should not be reduced by an immediate 25 percent gold payment, that such member shall be permitted in accordance with an appropriate resolution to have its quota increased in five annual installments, with the right to accelerate the payment of such installments. In June 1947, the IMF issued a statement recommending to its members that they take effective action to prevent external transactions in gold at premium prices, because such transactions tend to undermine exchange stability and to impair monetary reserves.
This paper explains various selected decisions of the IMF’s Executive Directors. The IMF has examined certain problems relating to the adjustment of its holdings of fluctuating currencies and to transactions and computations involving such currencies and has come to several conclusions. The IMF does not intend to apply the rules set forth in in the section II to its holdings of members' currencies having fluctuating rates when there is no practical interest for the IMF or members to do so. Whenever the IMF revalues its holdings of a fluctuating currency under paragraph 3, it will establish an account receivable or an account payable in respect of the amount of the currency payable by or to the member under Article IV, Section 8. Despite the improvement in the payments position of many members, sound gold and exchange policy of members continues to require that to the maximum extent practicable, gold should be held in official reserves rather than go into private hoards.