Compilation Guide

International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2003
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Status Under IMF Articles of Agreement
Article VIIIThe member country has accepted the obligations of Article VIII, Sections 2, 3, and 4 of the IMF’s Articles of Agreement.
Article XIVThe member country continues to avail itself of the transitional arrangements of Article XIV, Section 2.
Exchange Arrangement
CurrencyThe official legal tender of the country.
Other legal tenderThe existence of another currency that is allowed to be used officially in the country.
Exchange rate structureIf there is one exchange rate, the system is called unitary; if there are more than one exchange rates that may be used simultaneously for different purposes and/or by different entities, the system is called dual or multiple. Different effective exchange rates resulting from exchange taxes or subsidies are not included in this category.
Exchange arrangement with no separate legal tenderThe currency of another country circulates as the sole legal tender (formal dollarization), or the member belongs to a monetary or currency union in which the same legal tender is shared by the members of the union. Adopting such regimes is a form of surrendering the monetary authorities’ independent control over domestic monetary policy.
Currency board arrangementA monetary regime based on an explicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligation. This implies that domestic currency may be issued only against foreign exchange and that it must remain fully backed by foreign assets, thus eliminating traditional central bank functions, such as monetary control and the role of lender-of-last-resort. This leaves little scope for discretionary monetary policy, although some flexibility may still be afforded, depending on how strict the rules of the boards are.
Conventional pegged arrangementThe country pegs its currency (formally or de facto) at a fixed rate to another currency or a basket of currencies, where the basket is formed from the currencies of major trading or financial partners and weights reflect the geographical distribution of trade, services, or capital flows. The currency composites may also be standardized, such as those of the SDR. There is no commitment to maintain the parity irrevocably. The exchange rate may fluctuate within a narrow margin of less than ±1% around a central rate, or the maximum and minimum values of the exchange rate may remain within a narrow margin of 2% for at least three months. The monetary authority stands ready to keep the fixed parity through direct intervention (i.e., sale/purchase of foreign exchange in the market) or indirect intervention (e.g., aggressive use of interest rate policy, imposition of foreign exchange regulations or exercise of moral suasion that constrains foreign exchange activity, or intervention by other public institutions). Flexibility of monetary policy, though limited, is greater than in hard pegs because traditional central banking functions are still possible, and the monetary authority can adjust the level of the exchange rate, although relatively infrequently.
Pegged exchange rate within horizontal bandsThe value of the currency is maintained within certain margins of fluctuation of at least ±1% around a formal or a de facto fixed central rate. This category also includes the arrangements of the countries participating in the exchange rate mechanism (ERM) of the European Monetary System (EMS), which was replaced with ERM II on January 1, 1999. There is a limited degree of monetary policy discretion, which depends on the bandwidth.
Crawling pegThe currency is adjusted periodically in small increments at a fixed rate or in response to changes in selective quantitative indicators, such as past inflation differentials vis-à-vis major trading partners, differentials between the target inflation and expected inflation in major trading partners, and so forth. The rate of crawl may be set to generate inflation-adjusted changes in the currency (backward looking), or set at a preannounced fixed rate and/or below the projected inflation differentials (forward looking). Maintaining a credible crawling peg imposes constraints on monetary policy in a similar manner as a fixed peg system.
Crawling bandThe value of the currency is maintained within certain fluctuation margins of at least ±1% around a central rate, which is adjusted periodically at a fixed rate or in response to changes in selective quantitative indicators. The degree of flexibility of the exchange rate is a function of the width of the band, with bands chosen to remain either symmetric around a crawling central parity or to widen gradually with an asymmetric choice of the crawl of upper and lower bands (in the latter case, there may not be a preannounced central rate). The commitment to maintain the exchange rate within the band continues to impose constraints on monetary policy, with the degree of policy independence being a function of the bandwidth.
Managed floating with no preannounced path for the exchange rateThe monetary authority influences exchange rate movements through active intervention to counter the long-term trend of the exchange rate without specifying a predetermined exchange rate path or without having a specific exchange rate target. Indicators for managing the rate are broadly judgmental—balance of payments position, international reserves, parallel market developments—and adjustments may not be automatic. Intervention may be direct or indirect. A distinction is made between “tightly managed floating”—where intervention takes the form of very tight monitoring that generally results in a stable exchange rate without a clear exchange rate path, with the aim of permitting the authorities an extra degree of flexibility in deciding the tactics to achieve a desired path—and “other managed floating,” where the exchange rate is influenced in a more ad hoc fashion.
Independently floatingThe exchange rate is market determined, with any foreign exchange intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than at establishing a level for it. In these regimes, monetary policy is, in principle, independent of exchange rate policy.
Exchange taxForeign exchange transactions are subject to a special tax. Bank commissions charged on foreign exchange transactions are not included in this category; rather, they are listed under the exchange arrangement classification.
Exchange subsidyForeign exchange transactions are subsidized by using separate, nonmarket exchange rates.
Forward exchange marketThe existence of a forward exchange market.
Official cover of forward operationsOfficial coverage of forward operations refers to the case where an official entity (the central bank or the government) assumes the exchange risk of certain foreign exchange transactions.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe official requirements affecting the selection of currency and the method of settlement for transactions with other countries. When a country has concluded payments agreements with other countries, the terms of these agreements often lead to a prescription of currency for specified categories of payments to, and receipts from, the countries concerned. This category includes information on the use of domestic currency in transactions between residents and nonresidents, both domestically and abroad; it also indicates whether there are any restrictions on the use of foreign currency among residents.
Payments arrangements
Bilateral payments arrangementsTwo countries conclude an agreement to prescribe specific rules for payments to each other, including cases where private parties are also obligated to use specific currencies. These agreements can be either operative or inoperative.
Regional arrangementsMore than two parties participate in a payments agreement.
Clearing agreementsThe official bodies of two or more countries agree to offset with some regularity the balances that arise from payments to each other as a result of the exchange of goods, services, or—less often—capital.
Barter agreements and open accountsThe official bodies of two or more countries agree to offset exports of goods and services to one country with imports of goods and services from the same country, without payment.
Administration of controlThe authorities’ division of responsibility for monitoring policy, administering exchange controls, and determining the extent of delegation of powers to outside agencies (often banks are authorized to effect foreign exchange transactions).
International security restrictionsRestrictions on payments and transfers in connection with international transactions imposed by member countries for reasons of national or international security.
In accordance with IMF Executive Board Decision No. 144-(52/51)International security restrictions on the basis of IMF Executive Board Decision No. 144-(52/51), which establishes the obligation of members to notify the IMF before imposing such restrictions, or, if circumstances preclude advance notification, as promptly as possible.
In accordance with UN sanctionsSanctions imposed against a second body on the basis of a UN decision.
Payments arrearsOfficial or private residents of a member default on their payments or transfers in foreign exchange to nonresidents. This category includes only the situation in which domestic currency is available for residents to settle their debts, but they are unable to obtain foreign exchange, for example, because of the presence of an officially announced or unofficial queuing system; it does not cover nonpayment by private parties due to bankruptcy of the party concerned.
Controls on trade in gold (coins and/or bullion)The existence of separate rules for trading in gold, both domestically and with foreign countries.
Controls on exports and imports of banknotesThe existence of regulations for the physical movement of means of payment between countries. Where information is available, the category distinguishes between separate limits for the (1) export and import of banknotes by travelers and (2) export and import of banknotes by banks and other authorized financial institutions.
Resident Accounts
Indicates whether resident accounts that are maintained in the national currency or in foreign currency, locally or abroad, are allowed and describes how they are treated and the facilities and limitations attached to such accounts. When there is more than one type of resident account, the nature and operation of the various types of accounts are also described: for example, whether residents are allowed to open foreign exchange accounts with or without approval from the exchange control authority; whether these accounts may be held domestically or abroad; or whether the balances on accounts held by residents in domestic currency may be converted into foreign currency.
Nonresident Accounts
Indicates whether local nonresident accounts maintained in the national currency or in foreign currency are allowed and describes how they are treated and the facilities and limitations attached to such accounts. When there is more than one type of nonresident account, the nature and operation of the various types of accounts are also described.
Blocked accountsAccounts of nonresidents, usually in domestic currency. Regulations prohibit or limit the conversion and/or transfer of the balances of such accounts.
Imports and Import Payments
Describes the nature and extent of exchange and trade restrictions on imports.
Foreign exchange budgetInformation on the existence of a foreign exchange plan, i.e., prior allocation of a certain amount of foreign exchange, usually on an annual basis, for the importation of specific types of goods and/or services; in some cases, also differentiating between individual importers.
Financing requirements for importsInformation on specific import-financing regulations limiting the rights of residents to conclude private contracts in which the financing options differ from the official regulations.
Documentation requirements for release of foreign exchange for imports
Domiciliation requirementsThe obligation to domicile the transactions with a specified (usually domestic) financial institution.
Preshipment inspectionMost often a compulsory government measure aimed at establishing the veracity of the import contract in terms of volume, quality, and price.
Letters of creditParties are obligated to use letters of credit as a form of payment for their imports.
Import licenses used as exchange licensesImport licenses are not used for trade purposes but to restrict the availability of foreign exchange for legitimate trade.
Import licenses and other nontariff measures
Positive listA list of goods that may be imported.
Negative listA list of goods that may not be imported.
Open general licensesIndicates arrangements whereby certain imports or other international transactions are exempt from the restrictive application of licensing requirements.
Licenses with quotasRefers to cases where a license for the importation of a certain good is granted, but a specific limit is imposed on the amount to be imported.
Other nontariff measuresMay include prohibitions on imports of certain goods from all countries or of all goods from a certain country. Several other nontariff measures are used by members (e.g., phyto-sanitary examinations, setting of standards, and so forth), but these are not covered fully in the Report.
Import taxes and/or tariffsA brief description of the import tax/tariff system, including taxes levied on the foreign exchange made available for imports.
Taxes collected through the exchange systemIndicates if any taxes apply to the exchange side of an import transaction.
State import monopolyPrivate parties are not allowed to engage in the import of certain products or they are limited in their activity.
Exports and Export Proceeds
Describes restrictions on the use of export proceeds, as well as regulations on exports.
Repatriation requirementsThe obligation of exporters to repatriate export proceeds.
Surrender requirementsRegulations requiring the recipient of repatriated export proceeds to sell, sometimes at a specified exchange rate, any foreign exchange proceeds in return for local currency to the central bank, commercial banks, foreign exchange markets, or exchange dealers authorized for this purpose.
Financing requirementsInformation on specific export-financing regulations limiting the rights of residents to conclude private contracts in which the financing options differ from the official regulations.
Documentation requirementsThe same categories as in the case of imports are used.
Export licensesRestrictions on the right of residents to export goods. These restrictions may take the form of quotas (where a certain quantity of shipment abroad is allowed) or the absence of quotas (where the licenses are issued at the discretion of the foreign trade control authority).
Export taxesA brief description of the export tax system, including any taxes that are levied on the foreign exchange earned by exporters.
Payments for Invisible Transactions and Current Transfers
Describes the procedures for effecting payments abroad in connection with current transactions in invisibles, with reference to prior approval requirements, the existence of quantitative and indicative limits, and/or bona fide tests. Detailed information on the most common categories of transactions is provided only when regulations differ for the various categories. Indicative limits establish maximum amounts up to which the purchase of foreign exchange is allowed upon declaration of the nature of the transaction, mainly for statistical purposes. Amounts above those limits are granted if the bona fide nature of the transaction is established by the presentation of appropriate documentation. Bona fide tests also may be applied to transactions for which quantitative limits have not been established.
Trade-related paymentsIncludes freight/insurance (including possible regulations on non-trade related insurance payments and transfers); unloading/storage costs; administrative expenses; commissions; and customs duties and fees.
Investment-related paymentsIncludes profits/dividends; interest payments (including interest on debentures, mortgages, and so forth); amortization of loans or depreciation of foreign direct investments; and payments and transfers of rent.
Payments for travelIncludes international travel for business, medical treatment, tourism, and so forth.
Personal paymentsIncludes medical expenditures abroad; study expenses abroad; pensions (including regulations on payments and transfers of pensions by both state and private pension providers on behalf of nonresidents, as well as the transfer of pensions due to residents living abroad); and family maintenance/alimony (including regulations on payments and transfers abroad of family maintenance/alimony by residents).
Foreign workers’ wagesTransfer abroad of earnings by nonresidents working in the country.
Credit card use abroadUse of credit and debit cards to pay for invisible transactions.
Other paymentsIncludes subscription/membership fees, authors’ royalties, consulting/legal fees, and so forth.
Proceeds from Invisible Transactions and Current Transfers
Describes regulations governing exchange receipts derived from transactions in invisibles—including descriptions of any limitations on their conversion into domestic currency—and the use of those receipts.
Repatriation requirementsThe definitions of repatriation and surrender requirements are similar to those applied to export proceeds.
Restrictions on use of fundsRefers mainly to the limitations imposed on the use of receipts previously deposited in certain types of bank accounts.
Capital Transactions
Describes regulations influencing both inward and outward capital flows. The concept of controls on capital transactions is interpreted broadly. Thus, controls on capital transactions include prohibitions; need for prior approval, authorization, and notification; dual and multiple exchange rates; discriminatory taxes; and reserve requirements or interest penalties imposed by the authorities that regulate the conclusion or execution of transactions or transfers, or the holding of assets at home by nonresidents and abroad by residents. The coverage of the regulations applies to receipts as well as to payments and to actions initiated by nonresidents and residents. In addition, because of the close association with capital transactions, information is also provided on local financial operations conducted in foreign currency, describing specific regulations in force that limit residents and nonresidents issuing securities denominated in foreign currency or, generally, limitations on contract agreements expressed in foreign exchange.
Controls on capital and money market instrumentsRefers to public offerings or private placements on primary markets or their listing on secondary markets.
On capital market securitiesRefers to shares and other securities of a participating nature, and bonds and other securities with an original maturity of more than one year.
Shares or other securities of a participating natureIncludes transactions involving shares and other securities of a participating nature if they are not effected for the purpose of acquiring a lasting economic interest in the management of the enterprise concerned. Investment for the purpose of acquiring a lasting economic interest is treated under foreign direct investments.
Bonds or other debt securitiesRefers to bonds and other securities with an original maturity of more than one year. The term “other securities” includes notes and debentures.
On money market instrumentsRefers to securities with an original maturity of one year or less and includes short-term instruments, such as certificates of deposit and bills of exchange. The category also includes treasury bills and other short-term government paper, banker’s acceptances, commercial papers, interbank deposits, and repurchase agreements.
On collective investment securitiesIncludes share certificates and registry entries or other evidence of investor interest in an institution for collective investment, such as mutual funds, and unit and investment trusts.
Controls on derivatives and other instrumentsRefers to operations in other negotiable instruments and nonsecuritized claims not covered under the above subsections. These may include operations in rights; warrants; financial options and futures; secondary market operations in other financial claims (including sovereign loans, mortgage loans, commercial credits, negotiable instruments originating as loans, receivables, and discounted bills of trade); forward operations (including those in foreign exchange); swaps of bonds and other debt securities; credits and loans; and other swaps (interest rate, debt/equity, equity/debt, foreign currency, as well as swaps of any of the instruments listed above). Controls on operations in foreign exchange without any other underlying transaction (on spot or forward trading on the foreign exchange markets, on forward cover operations, and so forth) are also included.
Controls on credit operations
Commercial creditsCovers operations directly linked with international trade transactions or with the rendering of international services.
Financial creditsIncludes credits other than commercial credits granted by all residents, including banks, to nonresidents or vice versa.
Guarantees, sureties, and financial backup facilitiesIncludes those provided by residents to nonresidents and vice versa. It also includes securities pledged for payment or performance of a contract—such as warrants, performance bonds, and standby letters of credit—and financial backup facilities that are credit facilities used as a guarantee for independent financial operations.
Controls on direct investmentRefers to investments for the purpose of establishing lasting economic relations both abroad by residents and in the country by nonresidents. These investments are essentially for purposes of producing goods and services, and, in particular, investments that allow investor participation in the management of the enterprise. The category includes the creation or extension of a wholly owned enterprise, subsidiary, or branch and the acquisition of full or partial ownership of a new or existing enterprise that results in effective influence over the operations of the enterprise.
Controls on liquidation of direct investmentRefers to the transfer of principal, including the initial capital and capital gains, of a foreign direct investment as defined above.
Controls on real estate transactionsRefers to the acquisition of real estate not associated with direct investment. It includes, for example, investments of a purely financial nature in real estate or the acquisition of real estate for personal use.
Controls on personal capital transactionsCovers transfers initiated on behalf of private persons and intended to benefit other private persons. It includes transactions involving property to which the promise of a return to the owner with payments of interest is attached (loans, settlements of debt in their country of origin by immigrants), and transfers effected free of charge to the beneficiary (gifts and endowments, loans, inheritances and legacies, and emigrants’ assets).
Provisions specific to commercial banks and other credit institutionsDescribes regulations that are specific to these institutions, such as monetary, prudential, and foreign exchange controls. Inclusion of an entry in this category does not necessarily signify that the aim of the measure is to control the flow of capital. Some of these items (borrowing abroad, lending to nonresidents, purchase of locally issued securities denominated in foreign exchange, investment regulations) may merely be repetitions of the entries under respective categories of controls on capital and money market instruments, controls on credit operations, or direct investments when the same regulations apply to commercial banks as well as to other residents.
Open foreign exchange position limitsDescribes regulations on certain commercial bank balance sheet items (including capital) and on limits covering commercial banks’ positions in foreign currencies (including gold).
Provisions specific to institutional investorsDescribes controls specific to institutions, such as insurance companies and pension funds.
Other controls imposed by securities lawsRefers to additional regulations on capital transfers imposed by law, such as controls on the listing of foreign securities on local security markets.
Exchange Rate Arrangements and Anchors of Monetary Policy1,2
Exchange Rate RegimeMonetary Policy Framework
(Number of countries)Exchange rate anchorMonetary aggregate targetInflation targeting frameworkIMF-supported or other monetary programOther
Exchange arrangements with no separate legal tender (41)Another currency as legal tenderCFA franc zoneEuro area4,5
EcuadorAntigua andBenin*Cameroon*Finland
El Salvador6BarbudaBurkinaCentralFrance
Marshall IslandsGrenadaCôteRep.*Greece
Micronesia, Fed.St. Kitts andd’Ivoire*Chad*Ireland
States ofNevisGuinea-Congo,Italy
PalauSt. LuciaBissau*Rep. of*Luxembourg
PanamaSt. VincentMali*EquatorialNetherlands
San Marinoand theNiger*GuineaPortugal
Currency board arrangements (7)Bosnia and Herzegovina*
Brunei Darussalam
China—Hong Kong SAR
Other conventional fixed peg arrangements (42)Against a single currency (32)Against a composite (10)China, P.R. of†8
Bahamas, The7Fiji
Bahrain, Kingdom ofKuwait
BarbadosLibya Arab Jamahiriya
Cape Verde*Samoa
China, P.R. of†8Seychelles
Macedonia, FYR8
Netherlands Antilles
Saudi Arabia
Syrian Arab Rep.7
United Arab Emirates
Pegged exchange rates within horizontal bands (5)10Within a cooperative arrangement ERM II (1)Other band arrangements (4)Hungary†
Crawling pegs (5)BoliviaTunisia
Costa Rica8
Solomon Islands8
Source: IMF staff reports.
Exchange Rate RegimeMonetary Policy Framework
(Number of countries)Exchange rate anchorMonetary aggregate targetInflation targeting frameworkIMF-supported or other monetary programOther
Exchange rates within crawling bands (5)11BelarusSlovenia†8Israel†
Managed floating with no pre-announced path for the exchange rate (45)Gambia, The*Czech Rep.ArgentinaAfghanistan,
GhanaThailandAzerbaijanI.S. of
Iran, I.R. ofKenyaBurundi4
Jamaica8Kyrgyz Rep.Croatia
MauritiusLao PDR7Dominican Rep.4, 7
São Tomé andMoldova8Guatemala*4
Príncipe*MongoliaHaiti4, 8
Serbia andKazakhstan4
Russian Federation
Slovak Rep.4
Trinidad and Tobago
Independently floating (37)Malawi*AustraliaAlbaniaJapan4
Leone*CanadaCongo, DemPapua New Guinea4
Sri LankaChile7Rep. ofSomalia7,13
Venezuela,IcelandMadagascarUnited States4
deNew ZealandUganda
Rep. ofPeru*†
South Africa
Source: IMF staff reports.

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