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International Monetary Fund

Abstract

At a time when the growth in premium gold transactions engaged the close attention of the Fund, an effort was made to affect the actions of non-members in connection with these transactions. Under Article IV, Section 2, members must refrain from buying gold at a premium (a price above the par value plus the prescribed margin) or selling it at a discount (a price below the par value minus the margin). The provision does not explicitly prohibit sales by members at a premium or purchases at a discount, and it does not deal with purchases or sales by private parties or non-members. However, as already noted, under Article I (iii), it is a purpose of the Fund to promote exchange stability, maintain orderly exchange arrangements among members, and avoid competitive exchange depreciation; and under Article IV, Section 4(a), members undertake to collaborate with the Fund to promote exchange stability, maintain orderly exchange arrangements with other members, and avoid competitive exchange alterations. On June 18, 1947, the Fund communicated to members a policy statement 16 in which it deprecated international sales of gold at a premium and recommended that all members take effective action to prevent these transactions with “other countries or with the nationals of other countries.” The statement went on to say that: