APPENDIX IV. A Use Of The Funds Resources—Effect Of European Recovery Programx

International Monetary Fund
Published Date:
September 1948
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(Press Release of April 20, 1948)

The following Executive Board decision of April 5, 1948, was communicated by the Fund to all members on April 20, 1948:

Although the Fund recognizes that a general rule is not sufficient basis for all cases, the Fund must, in examining requests for the use of its resources, take into account the European Recovery Program, especially with respect to members who participate in the Program. Since the ERP is to be handled year by year, related policies on use of the Fund’s resources should be developed at similar intervals. For the first year the attitude of the Fund and ERP members should be that such members should request the purchase of United States dollars from the Fund only in exceptional or unforeseen cases. The Fund and members participating in ERP should have as their objective to maintain the resources of the Fund at a safe and reasonable level during the ERP period in order that at the end of the period such members will have unencumbered access to the resources of the Fund. This objective conforms with the intention of Article XIV, Section 1, that during the transitional period members should not impair the capacity of the Fund to serve its members or impair their ability to secure help from the Fund after the transitional period.


In connection with the above decision, the Executive Board considered the matter of requests by other members to buy from the Fund the currencies of members who are participating in ERP and recorded its opinion as follows:

During the European Recovery Program members of the Fund may wish to use the Fund’s holdings of the currency of a country participating in ERP. No member has the right to veto or limit the Fund’s sales of its currency to other members for use in accordance with the Fund Agreement. The Fund recognizes, however, that such sales should not have the effect of compelling a country to finance a large bilateral surplus with some countries, while it has to make net drawings on its gold and convertible currency reserves for current payments. Such circumstances would fall within the meaning of the “exceptional or unforeseen cases” mentioned in the policy decision of April 5, 1948, made by the Fund concerning the use of the Fund’s resources by ERP countries and would justify requests by a country to purchase foreign exchange from the Fund to make to other members current payments or payments authorized by Article VI, Section 2, but not to build up its monetary reserves. This is in fact the manner in which the Fund is intended to facilitate a system of multilateral payments.

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