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Mr. Barry J. Eichengreen and Mr. Hui Tong
We examine the impact of renminbi revaluation on foreign firm valuations, considering two surprise announcements of changes in China’s exchange rate policy in 2005 and 2010 and employing data on some 6,000 firms in 44 economies. Stock returns rise with renminbi revaluation expectations. This reaction appears to reflect a combination of improvements in general market sentiment and specific trade effects. Expected renminbi appreciation has a positive effect on firms exporting to China but a negative impact on those providing inputs for the country’s processing exports. Stock prices rise for firms competing with China in their home market but fall for firms importing Chinese products with large imported-input content. There is also some evidence that expected renminbi appreciation reduces the valuation of financially-constrained firms, presumably because appreciation implies reduced Chinese purchases of foreign securities. The results carry over when we consider ten instances of market-perceived changes in prospective Chinese currency policy.
International Monetary Fund
This paper describes economic developments in the Republic of Georgia during 1995. The paper highlights that in 1995, the economy of Georgia continues to face severe bottlenecks, especially arising from energy shortages. However, there are signs of increased confidence and a recovery in the first half of 1995, fostered by political stability and the initial fruits of financial stabilization and structural reform. In 1995, agricultural output and cargo transport appear to have increased, and retail trade is growing quickly. Industrial and construction activity, however, remains limited.
International Monetary Fund

Abstract

This paper discusses several IMF’s selected decisions of the Executive Board and selected documents. The procedures set forth in Section IV of SM/77/277 are approved, and members shall be guided by the considerations in Section IV with respect to the prompt notification of any changes in their exchange arrangements. Once the procedures for initial notification have been clarified, only a few issues remain to be dealt with in respect of subsequent notifications. One of these is the question of what would constitute a change in an exchange arrangement requiring notification. Upon receipt of notification of a change in exchange arrangements from a member the IMF staff would circulate it to the Executive Board. If the Board wishes, it could continue to be the normal practice that whenever a change is significant, its communication to the Board would be followed promptly by a staff paper describing the context of the change in policy and giving the IMF staff's assessment.

International Monetary Fund

Abstract

This paper describes that in developing countries, the moves toward more flexible exchange rate arrangements and liberalization of exchange controls often occurred in the context of comprehensive macroeconomic adjustment programs supported by the IMF. These programs featured a broad range of policy actions, including an increasing emphasis on structural reforms aimed at improving resource allocation and enhancing the supply response of the economy. With respect to restrictive systems, the trend toward liberalization of nontrade current and capital transactions continues, primarily because it is seen as ineffective, even counterproductive, to try to control such financial flows. This trend contrasts with trade where it appears that some major participants have been awaiting the outcome of the Uruguay Round before further reducing restrictions. A single currency peg has been the exchange arrangement most frequently used by developing countries, of which over one third currently have such an arrangement. This type of peg has the merit of being easy to administer and is generally chosen by countries that have a large share of foreign exchange transactions in the currency chosen as the peg.

International Monetary Fund. External Relations Dept.

Abstract

Annual Report on Exchange Arrangements and Exchange Restrictions 1984

Mr. Saleh M. Nsouli, Mr. John B. McLenaghan, and Mr. Klaus-Walter Riechel

Abstract

One of the principal aims of the effort to integrate the economies of the 16 member countries of the Economic Community of West African States (ECOWAS) is to expand intra-Community trade. This objective is to be achieved partly through the elimination of quantitive and other restrictions on trade.

International Monetary Fund. External Relations Dept.
This paper focuses on currency convertibility and the exchange rate system. The paper explains some of the factors involved in extending the freedom of currency convertibility, one of the IMF’s principal policy aims. It highlights that the IMF’s Articles of Agreement make the distinction between currency convertibility for residents and for nonresidents, but make it an obligation in principle to avoid restrictions on current payments of both categories. The paper also discusses management in developing countries as well as the link between growth and structural change.
International Monetary Fund. Research Dept.
This paper reviews an attempt that is made to arrive at a rough quantification of the possible effects of various techniques of IMF reserve creation through the IMF on its own liquidity. For purposes of comparison, the additional needs for IMF resources arising, respectively, from the several techniques of reserve creation are expressed in terms of the amounts of the currencies that are normally suitable for drawing, distributed in proportion to quota, to which the IMF would have to secure to cover the additional needs in question. When reserves are created by the IMF, their creation will in some instances involve a use of Fund resources and may affect its own liquidity. When account is taken of the secondary impact of gold investment on world reserves, it appears that the liquidity cost to the IMF of creating reserves by means of gold investment, though greater per unit of investment, might be somewhat less per unit of reserves created than that of other forms of investment.
International Monetary Fund. Research Dept.
This paper describes steps taken by the Venezuelan Government to meet the balance of payments crisis which developed from 1958 to 1960. In addition to balance of payments considerations, several factors associated with the development policies of the Government were considered in establishing the exchange rate. Petroleum exports have long played a dominant role in the balance of payments of Venezuela, accounting for more than 90 per cent of export earnings. The results achieved reflected the characteristics of Venezuela, particularly the balance of payments advantages and the strong tax base in an economy dominated by the petroleum industry. Nevertheless, the experience of the Venezuelan authorities provides a case study of the complexities and difficulties of exchange control devices and multiple exchange rates. It also illustrates the successful operation of monetary, fiscal, and exchange policies in overcoming balance of payments difficulties. In addition, examination of this experience casts some light on the economic effects of measures taken to control the balance of payments.
International Monetary Fund. Secretary's Department

Abstract

The speeches made by officials attending the IMF–World Bank Annual Meetings are published in this volume, along with the press communiqués issued by the International Monetary and Financial Committee and the Development Committee at the conclusion of the meetings.