Chapter

GERMANY

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2000
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Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: February 15,1961.
Exchange Arrangement
CurrencyAs of January 1, 1999, the currency of Germany is the euro. In cash transactions, however, the legal tender is the deutsche mark until 2002, when euro banknotes and coins will be issued.
Exchange rate structureUnitary.
Classification
Exchange arrangement with no separate legal tenderGermany participates in a currency union (EMU) comprising 11 members of the EU: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Internal conversion rates in respect to the national currencies of EMU participants were fixed to the euro on January 1, 1999, whereas the external exchange rate of the euro is market determined. The conversion rate between the euro and the deutsche mark was set at DM 1.95583 per €1. The ECB has the right to intervene to smooth out fluctuations in external exchange rates.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketResidents and nonresidents may freely negotiate forward exchange contracts for both commercial and financial transactions in all leading convertible currencies in the domestic exchange market and at international foreign exchange markets. Germany has no officially fixed rates in the forward exchange market. All transactions are negotiated at free market rates.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payment arrangementsNo.
Administration of controlAll banks in Germany are permitted to carry out foreign exchange transactions.
International security restrictions
In accordance with UN sanctionsIn compliance with UN Security Council resolutions and EU regulations, restrictions have been imposed on the making of payments and transfers for current international transactions regarding Iraq and the Federal Republic of Yugoslavia (Serbia/Montenegro) and against the Taliban (the Islamic State of Afghanistan). Restrictions against Libya were suspended on April 5, 1999.
Payment arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsYes.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measures
Negative listYes.
Licenses with quotasThe importation of certain nontextile goods from China is subject to the EU’s annual global quota.
Other nontariff measuresImports of numerous textile products are subject to the agreement on textiles and clothing and to bilateral agreements and regulations of the EU with various supplier countries. Most goods covered by the CAP are subject to variable import levies. Imports of rolled steel products from Russia and Ukraine are subject to an annual quota under a voluntary restrictions agreement. Imports of rolled steel products from Kazakhstan are subject to an autonomous EU quota.
Import taxes and/or tariffsNo.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsFor statistical purposes, an export notification is required for all goods.
Export licenses
Without quotasCertain exports (mostly military and dual-use goods) are subject to individual, global, or general licensing. The customs authorities exercise control over export declarations.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital and money market instrumentsEffective January 1, 1999, the restriction on purchases of federal savings bonds by nonresident entities and the prohibition on the sale or issue of bonds and/or money market securities and debt instruments denominated in deutsche mark issued by nonresident banks with a maturity of less than two years were abolished, as was the requirement that securities denominated in deutsche mark should only be issued under the lead management of credit institutions domiciled in Germany.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactionsNo.
Controls on personal capital movementsNo.
Provisions specific to commercial banks and other credit institutionsOn January 1, 1999, the provisions on minimum reserve requirements were replaced by corresponding ECB regulations.
Provisions specific to institutional investors
Limits (max.) on securities issued by nonresidents and on portfolio invested abroadThere are certain provisions for the portfolio of life insurance and pension funds for prudential regulations.
Limits (max.) on portfolio invested abroadThe same regulations apply as for securities.
Currency-matching regulations on assets/liabilities compositionCurrency-matching regulation for life insurance, pension funds, and old-age provision investment funds exist.
Other controls imposed by securities lawsNo.
Changes During 1999
Exchange arrangementJanuary 1. The currency of Germany became the euro. The conversion rate between the euro and the deutsche mark was set irrevocably at DM 1.95583 per €1.
Arrangements for payments and receiptsApril 5. Restrictions against Libya were suspended.
Capital transactions
Controls on capital and money market instrumentsJanuary 1. The restriction of purchases of federal savings bonds by nonresident entities and the prohibition on the sale or issue of bonds and/or money market securities and debt instruments denominated in deutsche mark issued by nonresident banks with a maturity of less than two years were abolished, as was the requirement that securities denominated in deutsche mark should only be issued under the lead management of credit institutions domiciled in Germany.
Provisions specific to commercial banks and other credit institutionsJanuary 1 The provisions on minimum reserve requirements were replaced by corresponding ECB regulations.

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