Chapter

Developments in Exchange Arrangements

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2015
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This section documents major changes and trends in the following related areas: exchange rate arrangements, intervention, monetary anchors, and the operation and structure of foreign exchange markets. It also reports on significant developments with respect to exchange taxes, exchange rate structures, and national currencies. There are nine tables within this section. Table 2 summarizes the detailed descriptions in the country chapters by reporting each IMF member country’s monetary policy framework as indicated by country officials and the classification of their de facto exchange rate arrangements. Table 3 breaks down countries’ de facto exchange rate arrangements for 2008–15. Table 4 highlights changes in the reclassification of the de facto exchange rate arrangements between January 1, 2014, and April 30, 2015. Table 5 outlines IMF member countries’ monetary anchors, and Table 6 reports other changes related to the exchange rate and monetary policy frameworks. Table 7 presents the structure of the foreign exchange markets among the membership. Finally, Table 8.a reports changes regarding foreign exchange markets, and Tables 8.b and 8.c report changes in currency and exchange rate structures and in exchange subsidies and taxes, respectively.

Table 2.De Facto Classification of Exchange Rate Arrangements and Monetary Policy Frameworks, April 30, 2015
The classification system is based on the members’ actual, de facto arrangements as identified by the IMF staff, which may differ from their officially announced, de jure arrangements. The system classifies exchange rate arrangements primarily on the basis of the degree to which the exchange rate is determined by the market rather than by official action, with market-determined rates being on the whole more flexible. The system distinguishes among four major categories: hard pegs (such as exchange arrangements with no separate legal tender and currency board arrangements); soft pegs (including conventional pegged arrangements, pegged exchange rates within horizontal bands, crawling pegs, stabilized arrangements, and crawl-like arrangements); floating regimes (such as floating and free floating); and a residual category, other managed. This table presents members’ exchange rate arrangements against alternative monetary policy frameworks in order to highlight the role of the exchange rate in broad economic policy and illustrate that different exchange rate regimes can be consistent with similar monetary frameworks. The monetary policy frameworks are as follows:

Exchange rate anchor

The monetary authority buys or sells foreign exchange to maintain the exchange rate at its predetermined level or within a range. The exchange rate thus serves as the nominal anchor or intermediate target of monetary policy. These frameworks are associated with exchange rate arrangements with no separate legal tender, currency board arrangements, pegs (or stabilized arrangements) with or without bands, crawling pegs (or crawl-like arrangements), and other managed arrangements.

Monetary aggregate target

The monetary authority uses its instruments to achieve a target growth rate for a monetary aggregate, such as reserve money, M1, or M2, and the targeted aggregate becomes the nominal anchor or intermediate target of monetary policy.

Inflation-targeting framework

This involves the public announcement of numerical targets for inflation, with an institutional commitment by the monetary authority to achieve these targets, typically over a medium-term horizon. Additional key features normally include increased communication with the public and the markets about the plans and objectives of monetary policymakers and increased accountability of the central bank for achieving its inflation objectives. Monetary policy decisions are often guided by the deviation of forecasts of future inflation from the announced inflation target, with the inflation forecast acting (implicitly or explicitly) as the intermediate target of monetary policy.

Other

The country has no explicitly stated nominal anchor, but rather monitors various indicators in conducting monetary policy. This category is also used when no relevant information on the country is available.
Source: IMF staff.Note: If the member country’s de facto exchange rate arrangement has been reclassified during the reporting period, the date of change is indicated in parentheses. CEMAC = Central African Economic and Monetary Community; ECCU = Eastern Caribbean Currency Union; EMU = European Economic and Monetary Union; WAEMU = West African Economic and Monetary Union.

Includes countries that have not explicitly stated nominal anchor, but rather monitor various indicators in conducting monetary policy.

The member participates in the European Exchange Rate Mechanism (ERM II).

Within the framework of an exchange rate fixed to a currency composite, the Bank Al-Maghrib adopted a monetary policy framework in 2006 based on various inflation indicators with the overnight interest rate as its operational target to pursue its main objective of price stability.

The country maintains a de facto exchange rate anchor to a composite.

The country maintains a de facto exchange rate anchor to the U.S. dollar.

The exchange rate arrangement or monetary policy framework was reclassified retroactively, overriding a previously published classification.

The country maintains a de facto exchange rate anchor to the euro.

The central bank has taken preliminary steps toward inflation targeting.

The exchange rate arrangement was reclassified twice during this reporting period, reverting to the classification in the previous year’s report.

Monetary Policy Framework
Exchange rate arrangement (number of countries)Exchange rate anchorMonetary aggregate target (25)Inflation-targeting framework (36)
U.S. dollar (42)Euro (25)Composite (12)Other (8)Other1 (43)
No separate legal tender (13)Ecuador El Salvador Marshall Islands MicronesiaPalau Panama Timor-Leste ZimbabweKosovo MontenegroSan MarinoKiribati Tuvalu
Currency board (11)Djibouti Hong Kong SAR ECCU Antigua and Barbuda Dominica GrenadaSt. Kitts and Nevis St. Lucia St. Vincent and the GrenadinesBosnia and Herzegovina BulgariaBrunei Darussalam
Conventional peg (44)Aruba The Bahamas Bahrain Barbados Belize Curaçao and Sint Maarten EritreaIraq (01/12) Jordan Oman Qatar Saudi Arabia South Sudan Turkmenistan United Arab Emirates VenezuelaCabo Verde Comoros Denmark2 São Tomé and Príncipe WAEMU Benin BurkinaFaso Côte d’Ivoire Guinea Bissau Mali NigerSenegal Togo CEMAC Cameroon Central African Rep. Chad Rep. of Congo Equatorial Guinea GabonFiji Kuwait Morocco3 SamoaBhutan Lesotho Namibia Nepal SwazilandSolomon Islands4
Stabilized arrangement (22)Cambodia (01/14) Guyana LebanonMaldives Suriname Trinidad and TobagoFYR MacedoniaSingapore Vietnam5Bangladesh5 Bolivia5 Burundi5 Democratic Rep. of the Congo5 Guinea5 Sri Lanka5 Yemen5Czech Rep.6 (11/13)Costa Rica (04/14) Azerbaijan5 Egypt5 Kazakhstan8 (02/14) Mauritania6 (11/13)
Crawling peg (3)Honduras6 (07/11) NicaraguaBotswana
Crawl-like arrangement (20)Jamaica8CroatiaIran5,6,9 (03/14) Libya (03/14)Belarus5 China5 Ethiopia5 Uzbekistan5 Rwanda6 (09/13) Tajikistan5 (05/14)Armenia5 Dominican Republic5 Guatemala5Angola5 (09/14) Argentina5 Haiti5 Lao P.D.R.5 Papua New Guinea (04/14) Switzerland7 Tunisia4,8
Pegged exchange rate within horizontal bands (1)Tonga
Other managed arrangement (10)LiberiaAlgeria SyriaMyanmar NigeriaKyrgyz Rep. Malaysia Pakistan Sudan Vanuatu
Floating (37)Afghanistan The Gambia (01/14) Madagascar Malawi Mozambique Seychelles (03/14) Sierra Leone Tanzania Ukraine (02/14)Albania Brazil Colombia Georgia Ghana Hungary Iceland India Indonesia Israel Korea Moldova New Zealand Paraguay Peru Philippines Romania Russia (11/14) Serbia South Africa Thailand Turkey UgandaKenya8 Mauritius Mongolia Zambia
Free floating (30)Australia Canada Chile Japan Mexico Norway Poland Sweden United KingdomSomalia United States EMU Austria Belgium Cyprus Estonia Finland France Germany Greece Ireland Italy Latvia (01/14) Lithuania (01/15) Luxembourg Malta Netherlands Portugal Slovak Rep. Slovenia Spain
Source: IMF staff.Note: If the member country’s de facto exchange rate arrangement has been reclassified during the reporting period, the date of change is indicated in parentheses. CEMAC = Central African Economic and Monetary Community; ECCU = Eastern Caribbean Currency Union; EMU = European Economic and Monetary Union; WAEMU = West African Economic and Monetary Union.

Includes countries that have not explicitly stated nominal anchor, but rather monitor various indicators in conducting monetary policy.

The member participates in the European Exchange Rate Mechanism (ERM II).

Within the framework of an exchange rate fixed to a currency composite, the Bank Al-Maghrib adopted a monetary policy framework in 2006 based on various inflation indicators with the overnight interest rate as its operational target to pursue its main objective of price stability.

The country maintains a de facto exchange rate anchor to a composite.

The country maintains a de facto exchange rate anchor to the U.S. dollar.

The exchange rate arrangement or monetary policy framework was reclassified retroactively, overriding a previously published classification.

The country maintains a de facto exchange rate anchor to the euro.

The central bank has taken preliminary steps toward inflation targeting.

The exchange rate arrangement was reclassified twice during this reporting period, reverting to the classification in the previous year’s report.

Source: IMF staff.Note: If the member country’s de facto exchange rate arrangement has been reclassified during the reporting period, the date of change is indicated in parentheses. CEMAC = Central African Economic and Monetary Community; ECCU = Eastern Caribbean Currency Union; EMU = European Economic and Monetary Union; WAEMU = West African Economic and Monetary Union.

Includes countries that have not explicitly stated nominal anchor, but rather monitor various indicators in conducting monetary policy.

The member participates in the European Exchange Rate Mechanism (ERM II).

Within the framework of an exchange rate fixed to a currency composite, the Bank Al-Maghrib adopted a monetary policy framework in 2006 based on various inflation indicators with the overnight interest rate as its operational target to pursue its main objective of price stability.

The country maintains a de facto exchange rate anchor to a composite.

The country maintains a de facto exchange rate anchor to the U.S. dollar.

The exchange rate arrangement or monetary policy framework was reclassified retroactively, overriding a previously published classification.

The country maintains a de facto exchange rate anchor to the euro.

The central bank has taken preliminary steps toward inflation targeting.

The exchange rate arrangement was reclassified twice during this reporting period, reverting to the classification in the previous year’s report.

Table 3.Exchange Rate Arrangements, 2008–15

(Percent of IMF members as of April 30)1

Exchange Rate Arrangement2008220093201042011520125201320142015
Hard peg12.212.213.213.213.213.113.112.6
No separate legal tender5.35.36.36.86.86.86.86.8
Currency board6.96.96.96.36.36.36.35.8
Soft peg39.934.639.743.239.542.943.547.1
Conventional peg22.322.323.322.622.623.623.023.0
Stabilized arrangement12.86.912.712.18.49.911.011.5
Crawling peg2.72.71.61.61.61.01.01.6
Crawl-like arrangement1.10.51.16.36.37.97.910.5
Pegged exchange rate within horizontal bands1.12.11.10.50.50.50.50.5
Floating39.942.036.034.734.734.034.035.1
Floating20.224.520.118.918.418.318.819.4
Free floating19.717.615.915.816.315.715.215.7
Residual
Other managed arrangement8.011.211.18.912.69.99.45.2
Source: AREAER database.

Includes 188 member countries and three territories: Aruba, Curaçao, and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

As retroactively classified February 2, 2009; does not include Kosovo, Tuvalu, and South Sudan, which became IMF members on June 29, 2009, June 24, 2010, and April 18, 2012, respectively.

As published in the 2009 AREAER; does not include Kosovo, Tuvalu, and South Sudan, which became IMF members on June 29, 2009, June 24, 2010, and April 18, 2012, respectively.

As published in the 2010 AREAER; does not include Tuvalu and South Sudan, which became IMF members on June 24, 2010, and April 18, 2012, respectively.

As published in the 2011 and 2012 AREAERs; does not include South Sudan, which became IMF member on April 18, 2012.

Source: AREAER database.

Includes 188 member countries and three territories: Aruba, Curaçao, and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

As retroactively classified February 2, 2009; does not include Kosovo, Tuvalu, and South Sudan, which became IMF members on June 29, 2009, June 24, 2010, and April 18, 2012, respectively.

As published in the 2009 AREAER; does not include Kosovo, Tuvalu, and South Sudan, which became IMF members on June 29, 2009, June 24, 2010, and April 18, 2012, respectively.

As published in the 2010 AREAER; does not include Tuvalu and South Sudan, which became IMF members on June 24, 2010, and April 18, 2012, respectively.

As published in the 2011 and 2012 AREAERs; does not include South Sudan, which became IMF member on April 18, 2012.

Table 4.Changes and Resulting Reclassifications of Exchange Rate Arrangements, January 1, 2014–April 30, 2015
CountryChangePrevious

Arrangement1
Arrangement in

the 2015 AREAER
AngolaIn 2014, the kwanza remained stable but has been gradually losing value (about 20% a year) since late September. International reserves have been used to smooth the devaluation, declining by about US$3½ billion since the end of June 2014, to US$28 billion at the end of 2014. Because the exchange rate started a depreciating trend within a 2% band against the U.S. dollar at the end of September 2014, with about 12% depreciation by the end of April 2015, the de facto exchange rate arrangement has been reclassified from a stabilized arrangement to a crawl-like arrangement effective September 17, 2014.Stabilized arrangementCrawl-like arrangement
CambodiaAs of January 2014, the riel has stabilized within a 2% band against the U.S. dollar, with one realignment in June 2014. Accordingly, the de facto exchange rate arrangement was reclassified from other managed to a stabilized arrangement, effective January 1, 2014.Other managedStabilized arrangement
Costa RicaSince April 2014, the exchange rate has stabilized within a 2% band against the U.S. dollar with a one-time adjustment in June. Accordingly, the de facto exchange rate arrangement was reclassified to stabilized from other managed arrangement, effective April 7, 2014.Other managedStabilized arrangement
Czech Republic2Since November 2013, the koruna has stabilized within a 2% band against the euro, with a temporary shift in July 2014. Accordingly, the de facto exchange rate arrangement was retroactively reclassified from other managed to a stabilized arrangement, effective November 19, 2013. The change is reflected as of January 1, 2014, corresponding to the first day of the period covered in this year’s Annual Report on Exchange Arrangements and Exchange Restrictions.Other managedStabilized arrangement
The GambiaDuring 2013, the dalasi depreciated against the U.S. dollar following a series of presidential exchange rate directives that imposed overvalued exchange rates. Because there were no further presidential interventions and in the absence of similar constraints on the exchange rate formation in 2014, the de facto exchange rate arrangement was reclassified from other managed to a floating arrangement, effective January 1, 2014.Other managedFloating
Honduras2In July 2011, the Central Bank of Honduras (by means of Resolution No. 284-7/2011 of July 21, 2011) reactivated the crawling band system that had been in operation until mid-2005. As a result, following a long period of stability, the lempira was allowed to crawl once again in July 2011 and thereafter followed a steadily depreciating trend against the U.S. dollar, with a small one-time adjustment in November 2011. Accordingly, the de facto exchange rate arrangement has been reclassified retroactively to a crawling peg arrangement, effective July 25, 2011. The change is reflected as of January 1, 2014, corresponding to the first day of the period covered in this year’s Annual Report on Exchange Arrangements and Exchange Restrictions.Crawl-like arrangementCrawling peg
Iran2From September 2012 to July 2013, the rial traded at three different rates—an official appreciated rate for imports of priority goods, a second official rate for the sale of oil export receipts and imports of other essential goods, and a flexible bureau rate for the sale of nonoil exports and the imports of all remaining goods. The authorities unified the two official exchange rates at the more depreciated rate in July 2013, after the premium between the depreciated official and bureau rates remained about 30%. From July 2013 to March 2014, the sole remaining official rate stayed stable against the U.S. dollar. Accordingly, the de facto exchange rate arrangement has been retroactively reclassified to stabilized from other managed, effective, July 3, 2013. The change is reflected as of January 1, 2014, corresponding to the first day of the period covered in this year’s Annual Report on Exchange Arrangements and Exchange Restrictions.Other managedStabilized arrangement
Iran3From March 2014 until the end of the year, the official exchange rate resumed a depreciating trend within a 2% band against the U.S. dollar, with one realignment in July 2014. Therefore, the de facto exchange rate arrangement has been retroactively reclassified to a crawl-like arrangement from stabilized, effective March 24, 2014.Crawl-like arrangement
Iraq2The de jure and de facto exchange rate arrangements have been retroactively reclassified to a conventional peg arrangement, effective January 15, 2012 (previously classified as de jure floating and de facto stabilized). The Central Bank Law gives the board of the Central Bank of Iraq the authority to formulate exchange rate policy, and the board has maintained its policy to keep the official exchange rate at ID 1,166 per U.S. dollar since January 15, 2012. The change is reflected as of January 1, 2014, corresponding to the first day of the period covered in this year’s Annual Report on Exchange Arrangements and Exchange Restrictions.Stabilized arrangementConventional peg
KazakhstanSince February 2014 (following an 18% devaluation against the U.S. dollar), the tenge has stabilized within a 2% range against the U.S. dollar (notwithstanding an asymmetric 6% expansion of the official band as of September 11, 2014). On that basis, the de facto exchange rate was reclassified to a stabilized from a crawl-like arrangement.Crawl-like arrangementStabilized arrangement
LatviaThe de jure exchange rate arrangement of the euro area is free floating. Latvia participates in a currency union (EMU) with, as of January 1, 2014, 17 other members (previously 16) of the EU and has no separate legal tender. The euro, the common currency, floats freely and independently against other currencies. The ECB publishes information regarding its interventions; it last intervened in March 2011. When it intervenes, the ECB intervenes at the quotes of the market makers.Conventional pegFree floating
LibyaSince March 2014, the dinar has followed an appreciating trend within a 2% band against the SDR. Therefore, the de facto exchange rate arrangement has been reclassified to a crawl-like from a conventional peg arrangement.Conventional pegCrawl-like arrangement
LithuaniaThe de jure exchange rate arrangement of the euro area is free floating. Effective January 1, 2015, Lithuania participates in a currency union (EMU) with 18 other members of the EU and has no separate legal tender. The euro, the common currency, floats freely and independently against other currencies. The ECB publishes information regarding its interventions; it last intervened in March 2011. When it intervenes, the ECB intervenes at the quotes of the market makers. Thus, following the adoption of the euro the de facto exchange rate arrangement of Lithuania has been reclassified to the category free floating from the category currency board. Previously, the de facto exchange rate arrangement was a currency board. The currency board was established by the Law on Credibility of the Litas and was in effect since April 1, 1994. The litas exchange rate against the euro was fixed by the Resolution of the Government of the Republic of Lithuania approving the proposal of the Bank of Lithuania regarding the anchor currency and the litas official exchange rate (February 1, 2002, No. 157) and the Resolution of the Bank of Lithuania on the Anchor Currency and the Official Exchange Rate of the Litas (February 1, 2002, No. 15).Currency boardFree floating
Mauritania2Since November 2013, the ouguiya has stabilized within a 2% band against the U.S. dollar, with two realignments, one on March 24, 2014, and the other on May 28, 2014. Accordingly, the de facto exchange rate arrangement was retroactively reclassified from other managed to a stabilized arrangement, effective November 20, 2013. The change is reflected as of January 1, 2014, corresponding to the first day of the period covered in this year’s Annual Report on Exchange Arrangements and Exchange Restrictions.Other managedStabilized arrangement
Papua New GuineaBeginning in April 2014, the exchange rate followed a depreciating trend within a 2% band against the U.S. dollar, with one realignment in June 2014. Accordingly, the de facto exchange rate arrangement was reclassified to a crawl-like arrangement from floating.FloatingCrawl-like arrangement
RussiaEffective November 10, 2014, the Bank of Russia eliminated its exchange rate corridor and canceled regular foreign exchange interventions, adopting a de jure floating exchange rate regime (previously a de jure other managed). Under this arrangement, the Bank of Russia does not interfere with the development of trends in the dynamics of the ruble’s exchange rate against foreign currencies as a result of fundamental macroeconomic factors and does not fix restrictions on the level of the ruble’s exchange rate or target values for changes in the exchange rate. Accordingly, the de facto exchange arrangement was reclassified from other managed to a floating arrangement. The Bank of Russia may perform interventions in the domestic foreign exchange market only in the event that risks to financial stability arise, and in connection with the replenishment or expenditure of sovereign funds.Other managedFloating
Rwanda2Since the end of September 2013, the franc has followed a depreciating trend within a 2% band against the U.S. dollar with several short periods of stability and with only one episode of spikes lasting less than five days a quarter. Accordingly, the de facto exchange rate arrangement was reclassified retroactively to a crawl-like arrangement from other managed arrangement, effective September 24, 2013. The change is reflected as of January 1, 2014, corresponding to the first day of the period covered in this year’s Annual Report on Exchange Arrangements and Exchange Restrictions.Other managedCrawl-like arrangement
SeychellesGiven the rupee’s increased volatility and departure from the 2% band against the U.S. dollar in April 2014, the de facto exchange rate arrangement was reclassified from a crawl-like arrangement to floating, effective March 27, 2014.Crawl-like arrangementFloating
TajikistanIn 2014, the exchange rate remained stabilized until April, and started a depreciating trend against the U.S. dollar within a 2% band in May, with one realignment in December 2014. Accordingly, the de facto exchange rate was reclassified to crawl-like from a stabilized arrangement, effective May 1, 2014. The rate of depreciation from May to December 2014 was about 9%. While the somoni depreciated more rapidly beginning at the end of March 2015, further observation is necessary to determine the new trend. Until then, the de facto exchange rate remains classified as a crawl-like arrangement.Stabilized arrangementCrawl-like arrangement
UkraineBetween March 2010 and December 31, 2013, the hryvnia remained stable against the U.S. dollar within a 2% band, with a slight shift of the band in the second half of 2012. In January 2014, the market exchange rate began depreciating, despite National Bank of Ukraine (NBU) interventions. In February 2014, the NBU discontinued massive interventions in support of the hryvnia, adjusted its official hryvnia–U.S. dollar exchange rate broadly in line with the market exchange rate, and resumed the practice of setting the official exchange rate based on the weighted average rate for the foreign exchange transactions of the previous day. Accordingly, the de facto exchange rate arrangement was reclassified to floating from a stabilized arrangement, effective February 7, 2014.Stabilized arrangementFloating
Source: AREAER database.

This column refers to the arrangements as reported in the 2014 AREAER, except in cases when a reclassification took place during January 1–April 30, 2014, in which case it refers to the arrangement preceding such a reclassification.

The exchange rate arrangement was reclassified retroactively, overriding a previously published classification for the entire reporting period or part of the period.

Cells in the column “Previous Arrangement” are blank if there was a subsequent reclassification during the reporting period.

Source: AREAER database.

This column refers to the arrangements as reported in the 2014 AREAER, except in cases when a reclassification took place during January 1–April 30, 2014, in which case it refers to the arrangement preceding such a reclassification.

The exchange rate arrangement was reclassified retroactively, overriding a previously published classification for the entire reporting period or part of the period.

Cells in the column “Previous Arrangement” are blank if there was a subsequent reclassification during the reporting period.

Table 5.Monetary Policy Frameworks and Exchange Rate Anchors, 2008–15

(Percent of IMF members as of April 30)1

U.S. DollarEuroCompositeOther

Currency
Monetary

Aggregate
Inflation

Targeting
Other2
2008333.014.48.03.711.722.96.4
2009328.714.47.44.313.315.416.5
2010426.514.87.93.713.216.417.5
2011525.314.27.44.215.316.317.4
2012522.614.26.84.215.316.820.0
201323.014.16.84.213.617.820.4
201422.513.66.34.213.117.822.5
201522.013.16.34.213.118.822.5
Source: AREAER database.

Includes 188 member countries and three territories: Aruba, Curaçao, and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

Includes countries that have no explicitly stated nominal anchor but instead monitor various indicators in conducting monetary policy. This category is also used when no relevant information on the country is available.

Does not include Kosovo, Tuvalu, and South Sudan, which became IMF members on June 29, 2009, June 24, 2010, and April 18, 2012, respectively.

Does not include Tuvalu and South Sudan, which became IMF members on June 24, 2010, and April 18, 2012, respectively.

Does not include South Sudan, which became an IMF member on April 18, 2012.

Source: AREAER database.

Includes 188 member countries and three territories: Aruba, Curaçao, and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

Includes countries that have no explicitly stated nominal anchor but instead monitor various indicators in conducting monetary policy. This category is also used when no relevant information on the country is available.

Does not include Kosovo, Tuvalu, and South Sudan, which became IMF members on June 29, 2009, June 24, 2010, and April 18, 2012, respectively.

Does not include Tuvalu and South Sudan, which became IMF members on June 24, 2010, and April 18, 2012, respectively.

Does not include South Sudan, which became an IMF member on April 18, 2012.

Table 6.Changes in Exchange Rate Arrangements, Official Exchange Rate, and Monetary Policy Framework, January 1, 2014–July 31, 2015
CountryChange
AlbaniaEffective January 28, 2015, in quantitative terms, the Bank of Albania defines price stability as keeping the annual change in consumer prices at 3%, on average terms and for long time periods (January 2015 revised Monetary Policy Report). Previously there was a fluctuation band of ±1% around the target.
AzerbaijanEffective February 16, 2015, the Central Bank of the Republic of Azerbaijan implemented an exchange rate policy based on the currency basket comprising the U.S. dollar and the euro. Previously a bilateral peg against the U.S. dollar had been in place since January 2011.
BelarusEffective January 1, 2015, the National Bank of the Republic of Belarus selected a monetary-targeting framework that uses growth in broad money as an intermediate target in monetary policy. Growth in rubel base money is used as an operating target in monetary policy. The inflation target for 2015 was set at 18% with a 2% band. The goals and parameters of monetary policy are defined annually in Main Directions of Monetary Policy of the Republic of Belarus, approved by the president (Decree No. 551 of December 1, 2014). Previously, the monetary framework was “other monetary framework.” The main goal of monetary policy in 2014 was to lower inflation to 11% using monetary instruments, taking into account the government’s economic policy measures. The interest rate policy in 2014 aimed to attain positive interest rates (in real terms) in order to ensure the safety and attractiveness of savings in rubels.
BelarusEffective January 9, 2015, the value of the currency basket is calculated as the weighted geometric mean of the bilateral exchange rates of the Belarusian rubel to the U.S. dollar, the euro, and the Russian ruble, with weights of 0.3, 0.3, and 0.4, respectively. Previously, the value of the basket was calculated as the geometric mean with equal weights for the currencies constituting the basket.
BelarusEffective January 9, 2015, the National Bank of the Republic of Belarus (NBRB) made the transition to a more flexible exchange rate policy that calls for minimizing currency interventions over the medium term while limiting daily volatility in the value of the currency basket. To this end, an operational rule is applied that limits the ability of the NBRB to influence the setting of the exchange rate. Currency interventions are used to reduce the volatility of the exchange rate, and not to regulate its level. In terms of the structure of the currency basket, the share of the Russian ruble was increased to 40%, while the shares of the euro and the U.S. dollar are each equal to 30%.
BotswanaEffective January 26, 2015, the weights of the basket changed to 50% for the South African rand and 50% for the SDR (in 2014, 55% and 45%, respectively), and the rate of change was set to zero—previously 0.16%.
Costa RicaEffective January 29, 2014, in the context of its commitments regarding inflation under the 2014–15 macroeconomic program, the Central Bank of Costa Rica adjusted its inflation target by 1 percentage point (pp), placing it within the range of 4% ± 1 pp (previously 5% ±1 pp).
Costa RicaEffective March 12, 2014, the board of directors of the Central Bank of Costa Rica expanded its exchange rate intervention policy and approved a second criterion for intervention between days in the event that the exchange rate exhibits behavior that is inconsistent with the variables that determine its behavior in the medium and long term. This criterion was not used in 2014 and remained unused at the time the current report was issued.
Costa RicaEffective March 13, 2014, to contain second round effects on inflation, the Central Bank of Costa Rica amended its monetary policy rate by applying an adjustment of 100 basis points.
Costa RicaEffective May 7, 2014, to contain second round effects on inflation, the Central Bank of Costa Rica amended its monetary policy rate in two occasions. In the first, it applied an adjustment of 100 basis points (bp) effective March 13, 2014, and, in the second, it applied an increase of 50 bp, raising the monetary policy rate to 5.25%.
Costa RicaEffective July 31, 2014, the Central Bank of Costa Rica launched a program for the purchase of foreign currency up to US$250 million, established under the revised 2014–15 macroeconomic program. As of December 31, 2014, the balance for the program was US$227 million.
Costa RicaEffective November 29, 2014, the board of directors of the Central Bank of Costa Rica determined that the balance of the foreign currency budget for the nonbank public sector could not exceed 3% of the balance of the estimated adequate reserves. This percentage was increased to 8% in November 2014.
Costa RicaEffective February 2, 2015, under Article 5 of the legal act adopted during session 5677-2015 of the Central Bank of Costa Rica’s (BCCR’s) board of directors held January 30, 2015, a de jure managed float exchange arrangement was established (previously classified as a crawling band arrangement). Under this arrangement, (1) the BCCR will allow the exchange rate to be freely determined by foreign currency supply and demand, but it may participate in the market in order to meet its own foreign currency requirements and those of the nonbank public sector and, at its discretion, to prevent sharp fluctuations in the exchange rate; (2) the BCCR may carry out direct operations or use foreign currency trading instruments that it deems appropriate, in accordance with current regulations; and (3) in its stabilization transactions in the foreign exchange market, the BCCR will continue to apply intervention rules updated to reflect the amendments established under this resolution.
Costa RicaEffective February 2, 2015, the Central Bank of Costa Rica’s board of directors lowered its policy rate by 50 basis points to a rate of 4.75%.
Costa RicaEffective March 19, 2015, the Central Bank of Costa Rica’s board of directors lowered its policy rate by 50 basis points to a rate of 4.25%.
Costa RicaEffective April 23, 2015, the Central Bank of Costa Rica’s board of directors lowered its policy rate by 25 basis points to a rate of 4.0%.
GhanaEffective January 2, 2015, the Bank of Ghana publishes daily reference foreign exchange rates against cedis. The U.S. dollar–cedi reference midrate is the weighted average of all the daily spot foreign exchange market transactions of at least US$10,000 reported by all banks until 2:30 p.m. to the Bank of Ghana. The other currencies’ reference rate to cedis is based on the current cross-rates in the international foreign exchange market from Reuters. Previously, the banking sector’s reference rate was derived from the interbank exchange rate, which was based on the daily volume of trades and the previous day’s actual rates reported by authorized dealers in their dealings with each other and with their customers. The Bank of Ghana official exchange rate was a weighted average of the previous day’s interbank trading rates.
GuatemalaEffective January 1, 2014, the fluctuation margin (added to or subtracted from the five-day moving average of the reference exchange rate) that determines whether the Bank of Guatemala (BOG) may intervene in the exchange market was increased from ±0.65% to ±0.70%. The BOG may intervene if the reference rate reaches or exceeds these limits around the moving average of the reference rates for the previous five business days, pursuant to Monetary Board Resolution No. JM-121-2013.
IndiaEffective September 1, 2014, based on the reference rate for the U.S. dollar and middle rates of the cross-currency quotes, the Reserve Bank of India began publishing reference rates for the pound sterling against the rupee on a daily basis.
IraqEffective February 16, 2014, the Central Bank of Iraq set the cash exchange rate at ID 1,190 per U.S. dollar, LC exchange rate at ID 1,184 per U.S. dollar, and transfer transaction rate at ID 1,187 per U.S. dollar.
IraqEffective February 16, 2014, the Central Bank of Iraq uses the official selling rate (previously buying rate) of the day minus 0.001% (previously 1%) to purchase the government’s foreign exchange receipts.
IraqEffective February 16, 2014, the commissions added to the currency selling window exchange rate of ID 1,166 per U.S. dollar to determine the selling rate of the Central Bank of Iraq were increased to ID 18 per U.S. dollar from ID 9 for import payments through LCs; ID 21 per U.S. dollar for drafts; and ID 24 per U.S. dollar from ID 13 for cash sales.
IraqEffective February 22, 2015, the Central Bank of Iraq buys foreign currency at the daily selling exchange rate minus 0.001% (previously ID 8 per U.S. dollar).
JapanEffective October 31, 2014, the Bank of Japan (BOJ) announced an expansion of the easing program to achieve its inflation target: accelerating the pace of increase in the monetary base to about ¥80 trillion annually (an addition of about ¥10–20 trillion compared with the past). This goal will be achieved through increased purchases of Japanese government bonds so that their amount outstanding rises annually by about ¥80 trillion (about ¥30 trillion more than in the past). The average remaining maturity of the BOJ’s Japanese government bond purchases will be extended to about 7–10 years (an extension of about three years at maximum compared with the past). The BOJ will also purchase exchange-traded funds and Japan real estate investment trusts so that their amounts outstanding rise by about ¥3 trillion annually (triple the past rate) and about ¥90 billion yen (triple the past rate), respectively.
KazakhstanEffective July 1, 2014, the National Bank of Kazakhstan launched a program to provide long-term tenge liquidity of 12 months in the form of foreign exchange interest rate swaps with second-tier banks.
KazakhstanEffective November 1, 2014, the National Bank of Kazakhstan performs operations to provide liquidity in the domestic market through overnight reverse repo transactions, with a reference to the market rate for these operations.
KazakhstanEffective December 1, 2014, the National Bank of Kazakhstan performs operations to provide liquidity in the domestic market through overnight foreign exchange swap transactions, with a reference to the market rate for these operations.
Kyrgyz RepublicEffective March 1, 2014, pursuant to the Law of the Kyrgyz Republic on the National Bank of the Kyrgyz Republic (NBKR), the NBKR’s main objective is to ensure price stability through its monetary policy. On December 20, 2013, the executive board of the NBKR decided to move to a new monetary policy basis whereby, in the development and implementation of monetary policy, interest rates rather than base money (reserve money) would serve as an intermediate target. The arrangement for determining the discount rate changed from being pegged to the average value of an NBKR 28-day note for the past four auctions to setting its rate by decision of the Executive board+F27 (National Bank of the Kyrgyz Republic Executive Board Resolution No. 51/9 of December 20, 2013). The NBKR’s goal, however, remains the same: achieving and maintaining price stability, as specified in the Law on the National Bank.
LatviaEffective January 1, 2014, the de jure exchange rate arrangement of the euro area is free floating. Latvia participates in a currency union (EMU) with, as of January 1, 2014, 17 other members (previously 16) of the EU and has no separate legal tender. The euro, the common currency, floats freely and independently against other currencies. The ECB publishes information regarding its interventions; it last intervened in March 2011. When it intervenes, the ECB intervenes at the quotes of the market makers.
LithuaniaEffective January 1, 2015, the de jure exchange rate arrangement of the euro area is free floating. Effective January 1, 2015, Lithuania participates in a currency union (EMU) with 18 other members of the EU and has no separate legal tender. The euro, the common currency, floats freely and independently against other currencies. The European Central Bank (ECB) publishes information regarding its interventions; it last intervened in March 2011. When it intervenes, the ECB intervenes at the quotes of the market makers. Thus, following the adoption of the euro the de facto exchange rate arrangement of Lithuania was reclassified to the category free floating from the category currency board. Previously, the de facto exchange rate arrangement was a currency board. The currency board was established by the Law on Credibility of the Litas and was in effect since April 1, 1994. The litas exchange rate against the euro was fixed by the Resolution of the Government of the Republic of Lithuania approving the proposal of the Bank of Lithuania regarding the anchor currency and the litas official exchange rate (February 1, 2002, No. 157) and the Resolution of the Bank of Lithuania on the Anchor Currency and the Official Exchange Rate of the Litas (February 1, 2002, No. 15).
LithuaniaEffective January 1, 2015, with the adoption of the euro, the monetary framework of an exchange rate anchor vis-à-vis the euro ceased to exist and was replaced by the monetary framework of the Eurosystem. To maintain price stability is the primary objective of the Eurosystem and of the single monetary policy for which it is responsible. This is stated in the Treaty on the Functioning of the European Union, Article 127(1). “Without prejudice to the objective of price stability,” the Eurosystem will also “support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union.” These include a “high level of employment” and “sustainable and non-inflationary growth.” Price stability is commonly defined as inflation rates at levels below, but close to, 2% over the medium term.
LithuaniaEffective January 1, 2015, with the adoption of the euro, the official exchange rate is the ECB reference rate. The ECB publishes a reference rate based on the daily concertation procedure between CBs within and outside the European System of Central Banks, which normally takes place at 2:15 p.m. CET. The reference rate against the euro is the average of the buying and selling rates. Previously, the litas was pegged to the euro at the rate of LTL 3.4528 per euro within the context of the ERM II. The official exchange rate was used for accounting and valuation. According to Article 3 of the Law on Credibility of the Litas, the official exchange rate of the litas and the anchor currency was established or changed by the Bank of Lithuania (BOL) in coordination with the government. The Law on the Bank of Lithuania authorized the BOL to determine the litas exchange rate regulation system independently. As a member of the ERM II, Lithuania had to adhere to its rules, in particular with respect to consultation with other ERM II partners.
FYR MacedoniaEffective July 1, 2014, the National Bank of the Republic of Macedonia revised the exchange rate list and added 22 new currency rates, which are on the exchange rate list of the ECB.
MaldivesEffective September 8, 2014, the Maldives Monetary Authority quotes buying, selling, and midrates each day. The midrate (reference exchange rate) is calculated each day as the midpoint of the weighted average of the buying and selling rates of commercial banks’ transactions with their clients conducted two days before (previously one day before).
MauritaniaEffective January 5, 2015, the official or reference exchange rate for the U.S. dollar (central rate) is the latest available fixing rate (previously the fixing rate of the previous day).
ParaguayEffective January 1, 2015, the inflation target for 2015 is 4.5% (lowered from 5% previously) with a tolerance band of ±2%, as determined by Resolution No. 8, Minute No. 88 of December 11, 2014.
ParaguayEffective March 27, 2015, the Executive Committee for Open Market Operations reduced the monetary policy rate to 6.5% (previously 6.75%).
RussiaEffective January 13, 2014, the daily volume of targeted interventions was decreased from US$60 million to zero.
RussiaEffective March 3, 2014, given the increasing volatility in the foreign exchange market, with the aim of maintaining financial stability, the Bank of Russia began to set the parameters of exchange rate policy daily. The amount of cumulative interventions that triggers a shift in the boundaries of the operational band by 5 kopeks was increased to US$1.5 billion.
RussiaEffective May 22, 2014, the volume of interventions aimed at smoothing out fluctuations in the ruble’s exchange rate in all subbands of the operational band was reduced by US$100 million, with the aim of increasing flexibility in setting the exchange rate of the ruble.
RussiaEffective June 17, 2014, the volume of interventions aimed at smoothing out fluctuations in the ruble’s exchange rate in all subbands of the operational band was reduced by US$100 million.
RussiaEffective June 17, 2014, the volume of cumulative interventions that leads to a shift in the floating operational band was lowered from US$1.5 billion to US$1 billion.
RussiaEffective August 18, 2014, the operational band was widened to Rub 9 from Rub 7, and the volume of interventions aimed at smoothing out fluctuations in the ruble’s exchange rate in all subbands of the operational band was set at US$0.00. The amount of cumulative interventions was reduced from US$1 billion to US$350 million.
RussiaEffective November 5, 2014, in the event that the value of the two-currency basket reaches the limits of the operational band, the intensity of currency interventions was set at US$350 million a day.
RussiaEffective November 10, 2014, the Bank of Russia eliminated its exchange rate corridor and canceled regular foreign exchange interventions, adopting a de jure and de facto floating exchange rate regime. Under this arrangement, the Bank of Russia does not interfere with the development of trends in the dynamics of the ruble’s exchange rate against foreign currencies as a result of fundamental macroeconomic factors and does not fix restrictions on the level of the ruble’s exchange rate or target values for changes in the exchange rate. The Bank of Russia may perform interventions in the domestic foreign exchange market only in the event that risks to financial stability arise, and in connection with the replenishment or expenditure of sovereign funds.
RussiaEffective January 1, 2015, the Bank of Russia made the transition to the inflation-targeting framework. The main objective of the Bank of Russia’s monetary policy is to ensure price stability. A medium-term target was set of bringing inflation down to 4% in 2017 and keeping it close to this level in the future.
SerbiaEffective January 12, 2015, the renminbi was included in the list of currencies against which the official middle exchange rates of the dinar are quoted in the National Bank of Serbia list of official exchange rates and in which banks and exchange bureaus may trade.
Solomon IslandsEffective May 27, 2014, the Solomon Islands dollar per U.S. dollar value is the value of the index multiplied by the Solomon Islands dollar per U.S. dollar value on the day the basket peg was introduced. The exchange rate (midrate) is now expressed in Solomon Islands dollars per U.S. dollar and is determined by the total index of the basket multiplied by the initial base rate expressed in Solomon Islands dollars rather than U.S. dollars as was done previously. The midrate is announced as the official rate.
Solomon IslandsEffective October 30, 2014, the ±1% band around the base rate was removed after the October 29, 2014, Central Bank of Solomon Islands board meeting. As a result, the Solomon Islands dollar now follows the basket peg more closely.
South AfricaEffective July 1, 2014, the weights for the nominal effective exchange rate (NEER), which is calculated according to South Africa’s largest international trading partners in manufactured goods, are based on average trade data in 2010/2011/2012. The NEER is calculated against 20 currencies (previously 15): the five largest weights are 29.26% euros (previously 35%), 13.72% U.S. dollars (previously 15%), 20.54% renminbi (previously 12%), 5.82% pounds sterling (previously 11%), and 6.03% Japanese yen (previously 10%).
SwitzerlandEffective January 15, 2015, the Swiss National Bank decided to discontinue the minimum exchange rate floor of CHF 1.20 per euro. Although the Swiss franc has departed from the 2% band against the euro since mid-January 2015, further observation is necessary to determine the new trend. Until then, the de facto exchange rate remains classified as a crawl-like arrangement.
ThailandEffective January 6, 2015, the Bank of Thailand changed the monetary policy target for 2015 from core inflation to headline inflation with an annual average target of 2.5% ±1.5%. Previously, the target was core inflation with a quarterly average target of 0.5% to 3.0%.
TurkmenistanEffective January 1, 2015, after having maintained an exchange rate of TMT 2.85 per U.S. dollar since May 2008, the Central Bank of Turkmenistan devalued the currency to TMT 3.50 per U.S. dollar.
UkraineEffective February 7, 2014, the National Bank of Ukraine adjusted its official hryvnia–U.S. dollar exchange rate broadly in line with the market exchange rate.
UkraineEffective April 4, 2014, the National Bank of Ukraine implemented a new method of calculating the official exchange rate. The official rate was the weighted average of the buying and selling rates of the hryvnia against the U.S. dollar based on transactions whose value date was the current day in the interbank foreign exchange market (including bank-client transactions) recorded in the System for the Confirmation of Agreements on the Interbank Foreign Exchange Market of Ukraine (Deal Confirmation System) after noon, but no later than 3 p.m., of the same day. Previously, the official hryvnia exchange rate against the U.S. dollar was defined as the weighted average of the selling and buying exchange rates relative to the U.S. dollar in the interbank foreign exchange market for the previous business day, with a possible deviation of ±2%.
UkraineEffective March 31, 2015, the National Bank of Ukraine changed the method of determining the official hryvnia–U.S. dollar exchange rate from the weighted average of the selling and buying exchange rates of the hryvnia against the U.S. dollar based on transactions whose value date was the current day in the interbank foreign exchange market (including bank-client transactions) recorded in the System for the Confirmation of Deals on the Interbank Foreign Exchange Market of Ukraine (Deal Confirmation System) after noon, but no later than 3 p.m., of the same day to the weighted average rate of the hryvnia against the U.S. dollar based on all the foreign exchange deals concluded on the previous day between banks and banks and their clients on “tod,” “tom,” and “spot” terms, regardless of the value date.
UruguayEffective July 1, 2014, the Macroeconomic Coordination Committee, composed of members from the Central Bank of Uruguay and the Ministry of Finance, announced April 8, 2014, a widening of the inflation-target band to 3%–7% from the previous range of 4%–6%. It also increased the monetary policy horizon to 24 months.
VenezuelaEffective March 24, 2014, the Alternative Foreign Currency Exchange System (Complementary System to the Administration of Foreign Exchange II, SICAD II) was established. It was administered by the Central Bank of Venezuela and the Ministry of Popular Power for the Economy, Finance, and Public Banking and under the operational control of said institution; the system connected the bid and offer rates presented by the operator institutions on behalf of their clients and/or users acting as suppliers or buyers of foreign currency, or on their own behalf as suppliers of foreign currency, employing for this purpose procedures for the registration, confirmation, and execution of these rates, which were agreed on automatically by the system in a blind, organized, and transparent market. The system had been in operation every banking business day; this system had been used for the performance of foreign currency purchase and sale operations, with an average exchange rate of Bs 50.34 per U.S. dollar, which remained stable around this value throughout the year (with a standard deviation of approximately Bs 0.7 per U.S. dollar).
VenezuelaEffective February 13, 2015, the SICAD II system was replaced by a new exchange rate platform—the Marginal Foreign Currency Exchange System (Sistema Marginal de Divisas, SIMADI)—which expanded participation in foreign exchange transactions to individuals and legal entities operating in any economic sector and having accounts in financial institutions stipulated in Exchange Agreement (Convenio Cambiario) No. 20. Foreign exchange transactions via the new platform may take place in cash and by transfers and are supervised by Sudeban and the central bank. At inception, foreign exchange transactions took place at the exchange rate Bs 170 per U.S. dollar, and since then local currency has depreciated by about 18% to Bs 200 per U.S. dollar. The share of foreign exchange transactions at the SIMADI rate is relatively small (about 4.3% of total foreign exchange supply).
VietnamEffective September 5, 2014, the de jure exchange rate arrangement (Clause 2, Article 15 Decree No. 70/2014/ND-CP) is a managed floating system, and is determined by the State Bank of Vietnam (SBV) based on a currency basket of countries with trade, financing, and investment relationships with Vietnam, consistent with macroeconomic targets of each period. Previously, the SBV applied the exchange rate within the permitted transaction band it stipulated for each period. The dong–U.S. dollar exchange rate could fluctuate around the official exchange rate within a daily transaction band of ±1%.
Source: AREAER database
Source: AREAER database
Table 7.Foreign Exchange Market Structure, 2012–15

(Number of IMF members as of April 30)1

2012201320142015
Spot exchange market187188188189
Operated by the central bank115118118118
Foreign exchange standing facility77767574
Allocation30312727
Auction29313235
Fixing5566
Interbank market159161161162
Over the counter115122127132
Brokerage46495050
Market making71737574
Forward exchange market127129127130
Source: AREAER database.

Includes 188 member countries and three territories: Aruba, Curaçao, and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

Source: AREAER database.

Includes 188 member countries and three territories: Aruba, Curaçao, and Sint Maarten (all in the Kingdom of the Netherlands) and Hong Kong SAR (China).

Table 8.a.Changes in Foreign Exchange Markets, January 1, 2014–July 31, 2015
CountryChangeType
ArgentinaEffective February 4, 2014, forward positions were limited to 10% of regulatory capital.Tightening
BangladeshEffective June 22, 2014, the limit on foreign exchange funds called “export development funds” for exporters’ import obligations was increased from US$1.2 billion to US$1.5 billion.Easing
BelarusEffective August 11, 2014, the limits on transactions involving the purchase and sale of foreign currency in the over-the-counter market between a bank and a business entity were raised from 1,000 currency units to 20,000 currency units. There are no restrictions on the size of transactions involving the purchase and sale of foreign currency between banks or between banks and nonresident banks (National Bank of the Republic of Belarus Executive Board Resolution No. 508 of August 11, 2014, on Foreign Currency Purchase and Sale Transactions in the Domestic Foreign Exchange Market).Easing
BelarusEffective December 19, 2014, a temporary ban was imposed on the purchase and sale of foreign currency in the over-the-counter market. All foreign currency purchase and sale transactions had to be performed in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company.Tightening
BelarusEffective February 20, 2015, the restrictions on foreign currency purchase and sale transactions in the over-the-counter (OTC) market were partially lifted. The functioning of the OTC market resumed in accordance with the procedure that was in effect until December 19, 2014, when a temporary ban was imposed on the purchase and sale of foreign currency in the OTC market. The supply of and demand for foreign currency on the part of business entities continues to be met primarily through trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company.Easing
BoliviaEffective January 1, 2015, since the implementation of direct sales in June 2013, the total bid (US$150 million daily) has been distributed as follows: US$100 million for the bolsín and US$50 million for direct sales—previously US$120 million for the bolsín and US$30 million for direct sales.Neutral
BulgariaEffective May 30, 2014, changes were made in Ordinance No. 26 of the Bulgarian National Bank on Financial Institutions, including registration and capital requirements (Official Gazette, issue 44 of May 27, 2014).Tightening
BulgariaEffective August 18, 2014, further amendments to Ordinance No. 26 of the Bulgarian National Bank regarding registration and capital requirements for financial institutions were undertaken (Official Gazette, issue 68 of August 15, 2014).Tightening
ChadEffective November 1, 2014, commercial banks may acquire euro notes at 1.5% from the CB.Easing
ChinaEffective March 17, 2014, the floating band of the renminbi’s (RMB’s) trading prices against the U.S. dollar in the interbank foreign exchange market was widened from 1% to 2%—i.e., on each business day, the trading prices of the RMB against the U.S. dollar in the market may fluctuate within a band of ±2% around the central parity released that day by the China Foreign Exchange Trade System.Easing
ChinaEffective March 19, 2014, the interbank foreign exchange market launched direct trading of the renminbi (RMB) against the New Zealand dollar. The middle rate of the RMB against the New Zealand dollar is determined based on the average of the day’s market makers’ quotes. Previously, the rate was determined through the cross-rates by the China Foreign Exchange Trading System based on the day’s middle rate of the RMB against the U.S. dollar and the exchange rates for the U.S. dollar against the New Zealand dollar.Neutral
ChinaEffective June 19, 2014, the interbank foreign exchange market launched direct trading of the renminbi (RMB) against the pound sterling. The middle rate of the RMB against the pound sterling is determined based on the average of the day’s market makers’ quotes. Previously, the rate was determined through the cross-rates by the China Foreign Exchange Trading System based on the day’s middle rate of the RMB against the U.S. dollar and the exchange rates for the U.S. dollar against the pound sterling.Neutral
ChinaEffective July 14, 2014, the 3% (4%) maximum limit on the spread between banks’ bid and offer rates of the RMB against the U.S. dollar for spot (cash) transactions to their clients was removed and the People’s Bank of China (PBC) has allowed banks to set exchange rate quotes to their clients based on supply and demand in the market (PBC No. 2014/188). Previously, the spread between the maximum spot prices (cash) offered and the minimum spot prices (cash) of the RMB against the U.S. dollar could not exceed 3% (4%) of the daily midrate. The difference between the highest spot exchange (cash) selling price and the lowest spot exchange (cash) buying price had to contain the day’s midrate.Easing
ChinaEffective September 30, 2014, the interbank foreign exchange market launched direct trading of the renminbi (RMB) with the euro. The RMB–euro midrate is decided by the average quote of that day’s market makers. Previously, the RMB-euro exchange rate was determined by the China Foreign Exchange Trading System based the calculation on that day’s cross-rate of the RMB–U.S. dollar midrate with the U.S. dollar–euro rate.Neutral
ChinaEffective October 28, 2014, the interbank foreign exchange market launched direct trading of the renminbi (RMB) with the Singapore dollar. The middle rate of the RMB against the Singapore dollar is determined based on the average of the day’s market makers’ quotes. Previously, the rate was determined through the cross-rates by the China Foreign Exchange Trading System based on the day’s middle rate of the RMB against the U.S. dollar and the exchange rates for the U.S. dollar against the Singapore dollar.Neutral
ChinaEffective December 15, 2014, the interbank foreign exchange market launched direct trading of the renminbi (RMB) with the Kazakhstani tenge. The daily RMB-tenge reference rate is determined by averaging the quotes from tenge-quoting banks by the China Foreign Exchange Trading System before the daily interbank foreign exchange market opens.Neutral
ColombiaEffective March 21, 2014, the Chinese renminbi, the Hong Kong dollar, the Singapore dollar, and the Korean won were added to the list of reserve currencies in which derivative operations can be conducted.Easing
ColombiaEffective March 21, 2014, the Bank of the Republic extended the program for the purchase of international reserves, with the goal of accumulating up to US$1 billion between April and June 2014.Neutral
ColombiaEffective June 20, 2014, the Bank of the Republic extended the program for the purchase of international reserves, with the goal of accumulating up to US$2 billion between July and September 2014.Neutral
ColombiaEffective July 31, 2014, regulations were established for foreign currency clearing and settlement systems and their operators in order to strengthen risk management in this area, and spot exchange transactions among exchange market intermediaries carried out within a foreign currency trading system or registered in a foreign currency transaction system were allowed to be cleared and settled using bilateral mechanisms if these systems’ services are temporarily unavailable.Easing
ColombiaEffective September 26, 2014, the Bank of the Republic extended the program for the purchase of international reserves, with the goal of accumulating up to US$1 billion between October and December 2014.Neutral
ColombiaEffective September 26, 2014, the option of settling transactions in foreign currency in the foreign currency clearing and settlement system through deposit accounts in the Bank of the Republic was eliminated, given that the foreign currency account service for exchange market intermediaries was discontinued.Neutral
ColombiaEffective November 28, 2014, any entity (not strictly exchange market intermediaries) supervised by the Financial Superintendency was allowed to participate in foreign currency trading systems.Easing
ColombiaEffective December 19, 2014, the Bank of the Republic announced that it would not continue to accumulate international reserves.Neutral
ColombiaEffective February 1, 2015, certain exchange market intermediaries were allowed to (1) send or receive drawings in foreign currency from operations that must be conducted through the foreign exchange market and (2) purchase and sell foreign currency and securities representing foreign currency from operations that must be conducted through the foreign exchange market. The relevant exchange market intermediaries may offer financial derivatives linked to the exchange rate, provided these are cleared and settled through a central clearinghouse of the counterparty authorized by the Financial Superintendency.Easing
Costa RicaEffective June 26, 2014, the board of directors of the Central Bank of Costa Rica (BCCR) developed a new foreign currency management strategy for the nonbank public sector, according to which the BCCR (1) will directly meet the nonbank public sector’s net daily foreign currency requirements by drawing on its international reserves; and (2) will replenish this foreign currency through participation in the foreign exchange market (Monex) on the basis of the BCCR’s macroeconomic program and the prevailing conditions in the Monex (seasonal trends in private sector foreign currency flows).Neutral
CyprusEffective December 12, 2014, foreign exchange bureaus were allowed to operate in Cyprus with Central Bank of Cyprus approval, in accordance with the provisions of the Central Bank of Cyprus Bureaux de Change Directive of 2014, issued December 12, 2014.Easing
DenmarkEffective March 24, 2015, the voluntary market-making agreement between six banks in the euro-krone market was dissolved.Neutral
EgyptEffective January 27, 2014, the Central Bank of Egypt offered about US$1.5 billion to the market at its fourth exceptional auction.Neutral
EgyptEffective May 14, 2014, the Central Bank of Egypt offered about US$1.1 billion to the market at its fifth exceptional auction, where banks were required to apply with the amounts of their clients’ entire outstanding staple food commodities import needs.Neutral
EgyptEffective January 29, 2015, the client and interbank bid and ask rates may both vary between ±10 piastres from the previous auction rate, with a minimum spread of zero and a maximum spread of 10 piastres between the bid and ask rates. Previously, the following restrictions applied: (1) The interbank bid and ask rates could vary between ±1 piastre around the weighted average rate of the latest auction held by the Central Bank of Egypt. (2) The client bid rate could vary between one piastre below the interbank bid rate and the interbank bid rate. (3) The client ask rate (for those with commercial needs) could vary between the interbank ask rate and one piastre above the interbank ask rate.Easing
EgyptEffective February 5, 2015, the Central Bank of Egypt imposed a daily foreign currency cash deposit limit of US$10,000 and a monthly maximum of US$50,000.Tightening
EgyptEffective March 1, 2015, the Central Bank of Egypt sold US$420 million in the interbank market to clear all outstanding strategic goods—namely, staple commodities, raw material, and pharmaceuticals.Neutral
EgyptEffective March 22, 2015, banknote bid rates may vary between −10 and +5 piastres of the previous auction rate, and the banknote ask rate may vary between −10 and +10 piastres of the previous auction rate, with a minimum bid and ask spread of zero and a maximum spread of 10 piastres.Tightening
FijiEffective January 1, 2015, authorized banks may write net forward sales contracts up to F$50 million (previously up to F$40 million).Easing
GhanaEffective February 4, 2014, foreign exchange bureaus may not sell or buy more than US$10,000 or its equivalent a transaction (BG/GOV/SEC/2014/01).Tightening
GhanaEffective February 4, 2014, offshore foreign exchange deals by resident and nonresident companies, including exporters and nonresident banks, are strictly prohibited (BG/GOV/ SEC/2014/03).Tightening
IndiaEffective January 7, 2014, authorized dealers may provide forward exchange cover to foreign portfolio investors, which consist of foreign institutional investors (FIIs), subaccounts under FIIs, and qualified foreign investors, effective January 7, 2014, up to the market value of their investments in equities and/or debt in India as of a particular date. Previously, authorized dealers provided forward exchange cover only to FIIs up to the full amount of their investments in debt instruments and equities and they could hedge the entire market value of their investments in equities and/or debt in India as of a particular date.Easing
IndiaEffective June 20, 2014, foreign portfolio investors eligible to invest in the Indian debt and equity assets under Foreign Exchange Management Act (FEMA, 1999) were allowed access to the domestic exchange-traded currency derivatives market for hedging currency risk arising from the market value of their exposure to Indian debt and equity securities. Domestic participants and foreign portfolio investors (FPIs) may take both long (buy) and short (sell) positions in foreign currency–rupee pairs up to US$10 million or equivalent an exchange without establishing any underlying exposure. FPIs may not take a short position beyond US$10 million at any time or a long position beyond US$10 million in any exchange without an underlying exposure (A.P. (DIR Series) Circular No. 148 of June 20, 2014).Easing
IndiaEffective September 30, 2014, outstanding forward contracts of importers and exporters booked on the basis of past performance must not exceed 100% of the eligible limit and must be on a deliverable basis. The eligible limit is defined as the past three years’ average of actual export or import turnover or the previous year’s actual turnover, whichever is higher for exporters or importers (effective September 30, 2014); previously importers could not exceed 25% of the eligible limit.Easing
IndiaEffective March 31, 2015, foreign portfolio investors (FPIs) were allowed to take long (buy) and short (sell) positions in U.S. dollar–rupee pairs of currency derivatives up to US$15 million an exchange. They may also take long and short positions in euro-rupee, pound sterling–rupee, and Japanese yen–rupee pairs totaling up to the equivalent of US$5 million an exchange. However, an FPI may not take a short position greater than US$15 million in a U.S. dollar–rupee pair and greater than US$5 million in all other total currency pairs at any time. A long position exceeding these limits in any exchange requires an underlying exposure. Previously, these underlying exposures were not required for trading in the currency futures and exchange-traded currency options market, which was available only to residents.Easing
IndiaEffective March 31, 2015, limits regarding underlying exposure for exchange-traded currency derivatives contracts were revised. Domestic participants and foreign portfolio investors (FPIs) may take long (buy) and short (sell) positions in U.S. dollar–rupee pairs of currency derivatives up to US$15 million an exchange. They may also take long and short positions in euro-rupee, pound sterling–rupee, and Japanese yen–rupee pairs totaling up to the equivalent of US$5 million an exchange. However, an FPI may not take a short position greater than US$15 million in a U.S. dollar–rupee pair and greater than US$5 million in all other total currency pairs at any time. A long position exceeding these limits in any exchange requires an underlying exposure. Previously, these underlying exposures were not required for trading in the currency futures and exchange-traded currency options market, which was available only to residents.Tightening
IndonesiaEffective November 10, 2014, the scope of operations that are acceptable as underlying transactions for derivative transactions was expanded (PBI 16/16/PBI/2014). Underlying transactions include transactions related to trades of goods and services, both domestic and foreign, and/or investments in the form of FDI, portfolio investment, loans, and capital and other investments, both domestic and foreign. Previously, fewer types of underlying transactions were acceptable for derivative transactions.Easing
IndonesiaEffective November 10, 2014, derivatives transactions may be settled by netting for the purpose of rollover, early termination, and unwinding of the initial derivative transaction. Netting is for transactions with a nominal value not exceeding US$1 million and is permitted, provided they are supported by underlying transactions from the initial derivatives transactions (PBI 16/16/PBI/2014).Easing
IraqEffective February 16, 2014, the total amount sold monthly to a bank (for its direct sales window and sales to financial transfer and intermediary companies) may not exceed 25% of its capital, calculated in U.S. dollars, for banks with capital less than ID 250 billion. Demand from banks with capital greater than ID 250 billion is met. U.S. dollars sold for documentary credits are transferred after the bank confirms receipt of the required documents.Easing
IraqEffective February 22, 2015, the weekly limits on the amount banks may buy in cash foreign exchange from the Central Bank of Iraq currency sales window were introduced at US$300,000 for banks with capital greater than ID 250 billion and US$200,000 for all other banks. The weekly limits for money transfer companies and money exchange bureaus are US$150,000 and US$50,000, respectively.Tightening
IsraelEffective December 9, 2014, the Bank of Israel announced that it will purchase US$3.1 billion in 2015 in the foreign exchange market to offset the effect of natural gas production on the exchange rate.Neutral
JamaicaEffective October 20, 2014, the Bank of Jamaica operates a foreign exchange surrender facility for public sector entities (PSE facility), which consolidates the foreign exchange demand of PSEs and coordinates foreign currency payments to minimize volatility in the market. Under this facility, commercial banks surrender 20% (previously 15%) of foreign currency purchases daily.Tightening
JordanEffective January 1, 2014, the board of directors of the Central Bank of Jordan gave money exchange companies a period of one year to reconcile their positions with the new paid-up-capital requirements.Easing
KoreaEffective January 1, 2014, spot foreign exchange transactions are allowed between security brokerages.Easing
KoreaEffective December 1, 2014, the won-yuan spot foreign exchange market was launched with 12 designated market makers.Neutral
Kyrgyz RepublicEffective February 13, 2014, the requirement to use cash machines by banks in conducting exchange transactions in cash foreign exchange was abolished.Easing
Kyrgyz RepublicEffective February 13, 2014, the requirements for the internal control on combating terrorism financing and legalization (laundering) of proceeds from crime in exchange bureaus were strengthened.Tightening
Kyrgyz RepublicEffective December 12, 2014, exchange bureaus were required to provide information on the sources of their operating funds.Tightening
Kyrgyz RepublicEffective January 8, 2015, in order to achieve the objectives and tasks of the National Bank of the Kyrgyz Republic, its board may change by a separate resolution the current regulations on economic standards and requirements and the foreign exchange position limits for a limited time.Neutral
Lao P.D.R.Effective August 14, 2014, the Bank of Lao P.D.R. (BOL) allows banks to enter into kip and foreign exchange forward contracts with maturities of 7 days, 14 days, 3 months, 6 months, and 1 year. Transactions between the BOL and commercial banks may be executed in U.S. dollars or Thai baht and must be made via kip. Transactions between commercial banks or between commercial banks and business units may be executed in various currencies (euros, yen, renminbi, Australian dollars, among others), but must be made via kip. The exchange rate may be set according to forward contracts between the BOL and banks, between banks, or between banks and business units.Easing
LatviaEffective January 1, 2014, the Bank of Latvia’s foreign exchange standing facility ceased to exist with Latvia’s adoption of the euro.Neutral
LithuaniaEffective January 1, 2015, the Bank of Lithuania (BOL) adopted the Rules of the Eurosystem Monetary Policy Operations to be carried out by the BOL (Resolution No. 03-324, December 9, 2014). The BOL may provide liquidity in foreign currency in accordance with the Eurosystem procedures. Foreign exchange transactions are solely for management of the BOL’s own financial assets. Previously, the BOL provided a foreign exchange window at the official euro exchange rate for commercial banks and for branches of foreign credit institutions (subject to reserve requirements) at their request. There was a fixed fee of LTL 50 a transaction for foreign exchange transactions (Paragraph 5 of the February 26, 2004, Resolution No. 16 of the Board of the Bank of Lithuania on approving the rules for concluding and executing litas and anchor currency–euro exchange transactions between the BOL and banks). The BOL also engaged in transactions at the official exchange rate with other institutions, such as the government and international organizations.Neutral
LithuaniaEffective January 1, 2015, the Law on Foreign Currency was repealed at the time of the introduction of the euro in Lithuania. According to the Law on the Introduction of the Euro, the euro is the legal tender in Lithuania. There are no limits on exchanging euros for other currencies. Any legal person may engage in foreign exchange operations with Bank of Lithuania (BOL) permission.Easing
FYR MacedoniaEffective March 11, 2014, the National Bank of the Republic of Macedonia Council adopted the Decision on Amendments of the Decision on Currency Exchange Operations. A principal amendment is cancellation of repurchases. Foreign exchange bureaus may now sell foreign currency cash to foreign natural persons in the same way as to domestic natural persons. In addition, foreign exchange operations were modernized through introduction of ATMs with a foreign exchange operations function for banks.Easing
FYR MacedoniaEffective July 1, 2014, the manner and the terms for buying and selling of foreign currency and the criteria for selecting market makers in the foreign exchange market were revised. Although the National Bank of the Republic of Macedonia (NBRM) may trade foreign currency only with market makers, if there are larger imbalances between supply and demand, the NBRM may buy and sell foreign currency with all banks. Twenty-two new currency rates which are on the exchange rate list of the European Central Bank were included in the list of currencies of the NBRM.Neutral
FYR MacedoniaEffective September 15, 2014, the terms of the agreement for market makers in the domestic foreign exchange market were revised. Under the revised terms, the maximum bid-ask spread on quotes with each other was lowered from MKD 0.07 to MKD 0.05 per euro.Tightening
FYR MacedoniaEffective September 15, 2014, the minimum size of a transaction between a market maker and the National Bank of the Republic of Macedonia in the foreign exchange market maker segment was increased from €0.35 million to €0.5 million. The minimum transaction size among market makers remained unchanged.Tightening
MexicoEffective December 8, 2014, the Foreign Exchange Commission announced that Banco de Mexico would auction up to US$200 million daily at a minimum exchange rate equivalent to the reference exchange rate set forth the preceding business day in accordance with Banco de Mexico provisions, plus 1.5%. Thus, the auction results in assignment only if the exchange rate depreciates at least 1.5% between sessions. As of March 11, 2015, this mechanism had been used twice (December 11, 2014; March 6, 2015).Neutral
MexicoEffective March 11, 2015, the Foreign Exchange Commission announced that Banco de Mexico would auction US$52 million daily at no minimum price from March 11, 2015, until June 8, 2015. The auction process announced on December 8, 2014, by the Foreign Exchange Commission continues.Neutral
MexicoEffective May 22, 2015, the Foreign Exchange Commission extended the daily US$52 million auction to September 29, 2015.Neutral
MexicoEffective July 31, 2015, the trigger for the additional auctions was reduced from a daily depreciation of 1.5% to 1%.Neutral
MexicoEffective July 31, 2015, the amount of the daily auction was increased from US$52 million to US$200 million until September 30, 2015.Neutral
NigeriaEffective November 25, 2014, the Central Bank of Nigeria increased the midpoint of the retail Dutch auction system rate from N 155 per US$ to N 168 per US$ and the band from ±3% to ±5%.Neutral
Papua New GuineaEffective June 4, 2014, the Bank of Papua New Guinea introduced an exchange rate trading band: within 75 basis points above the interbank midrate to buy kina and within 75 basis points below the midrate to sell kina.Tightening
PeruEffective October 1, 2014, the Central Reserve Bank of Peru began participating in foreign exchange swap auctions with financial institutions.Neutral
PhilippinesEffective December 22, 2014, thrift banks authorized to issue foreign LCs and pay, accept, and negotiate import and export drafts and bills of exchange may apply for Type 2 derivatives authority to operate as a dealer, broker, and end-user of deliverable foreign exchange forwards subject to certain conditions (Circular No. 864).Easing
PhilippinesEffective December 22, 2014, thrift banks, rural banks, and cooperative banks may buy and sell foreign exchange subject to compliance with foreign exchange rules and regulations.Easing
RussiaEffective September 17, 2014, the Bank of Russia adopted a decision to perform foreign exchange swap operations involving the sale of U.S. dollars for rubles. Interest rates are set at the key rate minus 1.00 percentage point for the ruble side of the transaction and 1.50 percentage points a year for the foreign exchange side of the transaction. Information about the parameters of these operations is posted on the Bank of Russia’s website.Neutral
RussiaEffective November 5, 2014, the Bank of Russia added repo auctions in U.S. dollars and euros with maturities of 7 days, 28 days, and 12 months to the set of instruments for providing foreign exchange.Neutral
RussiaEffective December 23, 2014, the Bank of Russia introduced credits in foreign currency backed by rights of claim on credits in foreign currency with maturities of 28 and 365 calendar days.Neutral
RussiaEffective March 30, 2015, the Bank of Russia raised the minimum interest rates at repo auctions and at auctions for credits in foreign currency backed by rights of claim on credits in foreign currency by 50 basis points. The interest rates on these operations were set at LIBOR + 100 basis points (previously LIBOR + 50 basis points).Neutral
RussiaEffective March 30, 2015, the interest rates on the operations of credits in foreign currency backed by rights of claim on credits in foreign currency with maturities of 28 and 365 calendar day were set at LIBOR + 125 basis points (previously LIBOR + 75 basis points).Neutral
São Tomé and PríncipeEffective January 4, 2015, regulations governing the interbank market came into force (NAP No. 04/2015).Neutral
Sierra LeoneEffective March 18, 2015, the Bank of Sierra Leone moved from the weekly foreign exchange retail auction to a weekly wholesale foreign exchange auction system of noncash foreign exchange for the payment of the importation of goods. Under the wholesale auction system, individuals no longer submit bids for participation in the auction. Commercial banks submit bids on their own behalf for subsequent sale to their customers. The offer amount, which is determined by the Bank of Sierra Leone, is currently US$3 million, and bids must be submitted in multiples of US$50,000, up to a maximum of US$300,000 a bidder (previously, under the retail auction, bids from all participants were submitted in multiples of US$5,000, up to a maximum of US$100,000 a bidder an auction). Foreign exchange is sold at the auction only through the competitive window. Bids in the wholesale foreign exchange auction are awarded from the highest rate to the bid that clears the preannounced offer amount. The spread between the highest successful bid and the bid that clears the auction must be less than or equal to 2%.Easing
Solomon IslandsEffective December 1, 2014, the Central Bank of the Solomon Islands (CBSI) widened the U.S. dollar–Solomon Islands dollar spread for commercial banks and the spread for transactions with the CBSI. Commercial banks may set their U.S. dollar–Solomon Islands dollar rate with a spread of ±20 basis points (previously 13 basis points) around the midpoint before setting cross-rates for the Solomon Islands dollar against other currencies. Foreign exchange transactions between commercial banks and the CBSI and between the government and the CBSI are effected at the CBSI’s own spread limit of ±12 basis points (previously 9 basis points) around the midpoint.Easing
Solomon IslandsEffective December 1, 2014, the interbank margin widened to ±12 basis points around the midpoint.Easing
Solomon IslandsEffective December 1, 2014, U.S. dollar and Australian dollar margins were widened: U.S. dollars to ±20 basis points and Australian dollars to ±25 basis points (previously 2%) around the midpoint.Easing
Sri LankaEffective January 1, 2014, of the 84 money changers authorized to deal in foreign exchange, 18 may purchase and sell all foreign currencies (previously only designated currencies). The remaining 66 money changers may only buy foreign currencies (previously only designated currencies) from their clients.Easing
SurinameEffective June 1, 2014, the Central Bank of Suriname issued the guidelines on licensing and minimum capital requirements to the money transaction offices.Tightening
TajikistanEffective March 13, 2015, significant administrative restrictions on foreign exchange trading were introduced. These included the introduction of a maximum exchange rate banks may use with their customers, and the closure of non-bank-owned cash foreign exchange kiosks (about half of all cash exchange points in the country).Tightening
Trinidad and TobagoEffective May 23, 2014, authorized dealers may resell foreign exchange proceeds obtained from a competitive auction up to the price of their successful bidding rate. Previously, a cap determined by the latest allocation exchange rate applied to the rate at which banks could sell foreign exchange purchased at auction to their clients. The last competitive auction of the year was held in June 2014.Easing
TunisiaEffective March 1, 2014, an electronic bank interlinking platform and a market-making agreement were introduced.Neutral
TunisiaEffective September 15, 2014, the Central Bank of Tunisia amended Circular No. 2001-11 to introduce the designation of foreign exchange market makers.Neutral
TurkeyEffective April 28, 2014, the daily foreign exchange auction selling amount was decreased from “minimum US$50 million” to “minimum US$40 million.”Neutral
TurkeyEffective May 9, 2014, the daily foreign exchange auction selling amount was decreased from “minimum US$40 million” to “minimum US$20 million.”Neutral
TurkeyEffective July 25, 2014, the daily foreign exchange auction selling amount was decreased from “minimum US$20 million” to “minimum US$10 million.”Neutral
TurkeyEffective September 29, 2014, the daily foreign exchange auction selling amount was increased from “minimum US$10 million” to “minimum US$40 million.”Neutral
TurkeyEffective October 9, 2014, the lending rates applied to the central bank’s one-week-maturity borrowing from the last-resort facility were reduced from 10% to 7.5% for U.S. dollars and from 10% to 6.5% for euros in the foreign exchange deposit market.Easing
TurkeyEffective December 1, 2014, the foreign exchange auction selling amount was decreased from “minimum US$40 million” to “minimum US$20 million.”Neutral
TurkeyEffective December 9, 2014, the daily foreign exchange auction selling amount was increased from “minimum US$20 million” to “minimum US$40 million.”Neutral
TurkeyEffective February 27, 2015, the foreign exchange auction selling amount is set on a daily basis depending on the conditions in the foreign exchange market. The minimum amount of the auction for the following day is announced by the Central Bank of the Republic of Turkey at 5:20 p.m. through Reuters CBTQ, Bloomberg CBT/Foreign Exchange Auctions, and Anadolu Agency DV007 pages. Further, on days when it is deemed necessary due to excessive volatility in the exchange rates, the foreign currency selling amount may be raised up to 50 times (previously 10 times) the announced minimum.Neutral
TurkeyEffective March 10, 2015, the lending rates applied to the Central Bank of the Republic of Turkey’s one-week-maturity borrowing from its standing facility were reduced from 7.5% to 4.5% for U.S. dollars and from 6.5% to 2.5% for euros.Easing
UkraineEffective June 8, 2014, the registration of exchange offices by the regional offices of the National Bank of Ukraine was discontinued.Tightening
UkraineEffective September 8, 2014, the National Bank of Ukraine reactivated its multiple price auctions, which had not been in operation since February 18, 2010.Neutral
UkraineEffective September 19, 2014, banks were allowed to submit multiple bids in the National Bank of Ukraine’s auctions.Neutral
UkraineEffective October 9, 2014, banks were allowed to purchase foreign exchange to conduct foreign currency exchange transactions.Easing
UkraineEffective November 5, 2014, some of the operational rules of the National Bank of Ukraine’s multiple price auction changed.Neutral
UkraineEffective November 12, 2014, the selection of the winning bids in the National Bank of Ukraine’s (NBU’s) auctions was changed. The NBU first determines the standard deviation of the bids from the simple average of all bids. Bids that are within the standard deviation are considered for calculating the weighted average of the bids. The bids are satisfied starting from the bid with the exchange rate corresponding to the weighted average of the submitted bids in descending order of the bid rates until the announced auction size is fully met. Previously, winning bids were selected according to the following method: first the weighted average of the bids was calculated disregarding the bids with the five most depreciated exchange rates. Foreign exchange was sold starting with the bid with the most depreciated exchange rate within 1% of the weighted average exchange rate until all foreign exchange offered for sale was exhausted. The cutoff rate was determined as the exchange rate of the last at least partially satisfied bid. The cutoff rate and the weighted average rate are posted at 11:00 a.m. on the NBU page in Thomson Reuters. The weighted average rate is the indicative rate for the day.Neutral
UkraineEffective February 5, 2015, the National Bank of Ukraine suspended its multiple price auctions.Neutral
UkraineEffective March 4, 2015, banks were prohibited from entering into derivative transactions on the stock exchanges.Tightening
UkraineEffective March 4, 2015, limits were introduced on a bank’s daily net foreign exchange purchase in the interbank and retail market for its own position. The limit for (1) “tod” transactions; (2) “tom,” “spot,” and “forward” transactions; and (3) “tod,” “spot,” and “forward” transactions is 0.1% of the bank’s regulatory capital on the previous day. Swap transactions are not subject to the limits.Tightening
UkraineEffective March 4, 2015, a bank’s daily net foreign exchange purchase in the interbank market for its own position for “forward” terms may not exceed 0.1% of its regulatory capital.Tightening
UkraineEffective April 15, 2015, authorized banks’ purchase of foreign exchange received from foreign investors to increase the authorized capital of the bank were exempted from the limit on banks’ daily net foreign exchange purchases in the interbank market.Easing
VenezuelaEffective February 10, 2014, the special foreign exchange auctions through the Complementary System to the Administration of Foreign Exchange is administered and managed by the National Foreign Trade Center, which is also responsible for allocating foreign exchange at the close of each auction.Neutral
VenezuelaEffective April 10, 2014, the Central Bank of Venezuela set the respective exchange rate for the settlement of foreign currency allocated through special auctions of foreign currency or securities denominated in foreign currency carried out through the Complementary System to the Administration of Foreign Exchange (SICAD) and managed by the National Foreign Trade Center in accordance with Exchange Agreement No. 26 of April 3, 2014. The exchange rate resulting from the last allocation of foreign currency performed through the SICAD is a reference exchange rate that applies to the settlement of foreign currency in certain operations.Neutral
VenezuelaEffective September 24, 2014, exchange Agreement No. 30 of September 23, 2014 (Official Gazette No. 40504 of September 24, 2014) established the settlement in bolívares of operations involving the sale of foreign currency by Petróleos de Venezuela, S.A. to the Central Bank of Venezuela for the purposes of making special contributions to the National Development Fund.Tightening
VenezuelaEffective February 13, 2015, the SICAD II system was replaced by a new exchange rate platform—the Marginal Foreign Currency Exchange System (Sistema Marginal de Divisas, SIMADI)—which expanded participation in foreign exchange transactions to individuals and legal entities operating in any economic sector.Tightening
Source: AREAER database.
Source: AREAER database.
Table 8.b.Changes in Currency and Exchange Rate Structures, January 1, 2014–July 31, 2015
CountryChangeType
ArgentinaEffective September 26, 2014, Communication A 3608 governing the exchange rate applied in the case of proceeds from exports of goods and services surrendered after the established deadline and payments for imports pending official customs entry was reinstated.Tightening
BelarusEffective April 21, 2014, the over-the-counter exchange rate set by the bank is used when persons performing foreign exchange operations surrender foreign currency in an amount less than the lot established in exchange trading, and in the resale of unused foreign currency. Previously, amounts under one lot were sold directly to banks at the rate established at the Belarusian Currency and Stock Exchange on that day; if no trading session in a particular currency took place on that date or the currency was not traded at the Belarusian Currency and Stock Exchange, the official National Bank of the Republic of Belarus rate on the sale date applied.Easing
BelarusEffective August 11, 2014, the limits on transactions involving the purchase and sale of foreign currency in the over-the-counter market between a bank and a business entity were raised from 1,000 currency units to 20,000 currency units. There are no restrictions on the size of transactions involving the purchase and sale of foreign currency between banks or between banks and nonresident banks (National Bank of the Republic of Belarus Executive Board Resolution No. 508 of August 11, 2014, on Foreign Currency Purchase and Sale Transactions in the Domestic Foreign Exchange Market).Easing
CroatiaEffective January 27, 2015, the Consumer Credit Act was amended with a view to freezing the kuna–Swiss franc exchange rate at HRK 6.39 per Swiss franc (the rate before the Swiss National Bank abandoned its minimum Swiss franc–euro rate) for repayment of Swiss franc loans and kuna loans with a Swiss franc currency clause for such loans undertaken prior to this date. This kuna–Swiss franc rate is valid for one year from the date of implementation.Neutral
EcuadorEffective February 27, 2015, electronic currency is placed in circulation exclusively by the Central Bank of Ecuador (CBE), backed by its liquid assets, based on policies and regulations issued by the Monetary and Financial Policy and Regulatory Board (Resolution No. 005-2014-M). The CBE is the only entity authorized to provide and manage national or electronic metallic currency in Ecuador equivalent and convertible to U.S. dollars, in accordance with the provisions of the code and the regulation and authorization of the Monetary and Financial Policy and Regulatory Board. The currency referred to is a means of payment and is unrestricted legal tender with unlimited redeemability in Ecuador within the framework of the regulations issued by the Monetary and Financial Policy and Regulatory Board. The government may not require a private individual or legal entity to accept any currency other than the U.S. dollar.Neutral
LatviaEffective January 1, 2014, the currency of Latvia changed from the Latvian lats to the euro when Latvia joined the EMU.Neutral
LithuaniaEffective January 1, 2015, the currency of Lithuania changed from the Lithuanian litas to the euro when Lithuania joined the EMU.Neutral
MyanmarEffective March 31, 2014, the process for redemption of foreign exchange certificates was successfully completed.Easing
ZimbabweEffective January 30, 2014, the Reserve Bank of Zimbabwe announced the adoption of four additional official currencies: the Australian dollar, Chinese renminbi, Indian rupee, and Japanese yen.Neutral
Source: AREAER database.
Source: AREAER database.
Table 8.c.Changes in Exchange Subsidies and Exchange Taxes, January 1, 2014–July 31, 2015
CountryChangeType
ArubaEffective April 1, 2015, the State Ordinance on Exchange Rate Margin Compensation Central Bank of Aruba requires commercial banks to pay a fee to the Central Bank of Aruba on all sales of foreign currency to the public, both cash and noncash, amounting to 3/8% of the florin equivalent of these sales. The Central Bank of Aruba will pay a fee to the commercial banks on all purchases of foreign currency from the public, both cash and noncash, amounting to 1/8% of the florin equivalent of these purchases.Tightening
BelarusEffective December 20, 2014, a temporary tax of 30% payable by banks on the purchase of foreign currency in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company was imposed. The banks received reimbursement for the tax from organizations and individual entrepreneurs on whose behalf the foreign currency was acquired in the trading sessions. The amount of the tax was gradually reduced to 20% and was repealed as of January 8, 2015.Tightening
BelarusEffective December 29, 2014, the temporary tax of 30% payable by banks on the purchase of foreign currency in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company, imposed on December 20, 2014, was reduced to 20%.Easing
BelarusEffective January 5, 2015, the temporary tax of 30% payable by banks on the purchase of foreign currency in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company, imposed on December 20, 2014, and reduced to 20%, effective December 29, 2014, was further reduced to 10%.Easing
BelarusEffective January 8, 2015, the temporary tax of 30% payable by banks on the purchase of foreign currency in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company, imposed on December 20, 2014, was repealed.Easing
BrazilEffective June 4, 2014, the maximum maturity of external loans subject to the 6% IOF rate was reduced from 360 to 180 days. External loans with an initial term of more than 180 days will still be subject to the 6% IOF rate if the loan is repaid within the 180-day period.Easing
UkraineEffective April 1, 2014, the Law on Mandatory Pension Insurance Tax imposed a 0.5% foreign exchange transaction tax in order to replenish the state pension fund. The tax applies to all cash and noncash foreign exchange purchases (net of transaction fees) by residents and nonresidents. Banks must accrue, withhold, and remit to the Special Fund of the State Budget the proceeds of this tax. Banks must also report monthly to the National Bank of Ukraine the amount of accrued/withheld foreign exchange transaction tax.Tightening
UkraineEffective January 1, 2015, the Law on Mandatory Pension Insurance Tax increased the tax on individuals’ foreign currency cash purchase from 0.5% to 2%, except purchases for loan repayment.Tightening
UkraineEffective January 1, 2015, the Law on Mandatory Pension Insurance Tax eliminated the tax on all noncash foreign exchange purchases.Easing
Source: AREAER database.
Source: AREAER database.

Exchange Rate Arrangements8

A marked shift toward more stable managed arrangements characterized developments in exchange rate arrangements in this reporting period against the backdrop of weak global recovery and slowly improving financial conditions.

  • Other managed arrangements: There was a large decline in the number of countries in this residual exchange rate category between May 1, 2014, and April 30, 2015, with a clear shift toward more predictable exchange rate management. The number of countries in this category decreased to its lowest level since the introduction of this category in 2008. This exchange rate arrangement is characteristic of periods during which volatile foreign exchange market conditions hinder the use of more clearly defined exchange rate arrangements, and its use has gradually diminished with improving global financial conditions. The number of other managed arrangements declined by 8, to 10, with no new additions to this category. Of the eight countries that left this group, five met the criteria for a stabilized arrangement (Cambodia, Costa Rica, Czech Republic, Islamic Republic of Iran, Mauritania), one moved to a crawl-like arrangement (Rwanda), and two moved to a floating arrangement (The Gambia, Russia). Of the eight countries, four returned to their exchange rate arrangement in the previous reporting period—stabilized (Cambodia, Costa Rica), crawl like (Rwanda), and floating (The Gambia).

  • No separate legal tender; currency boards: There was only one change among the countries that have no separate legal tender or have currency boards. This is not surprising given that countries with these arrangements tend to maintain their exchange rate policies unless there are large structural changes in their economies that result in an exit. Lithuania adopted the euro on January 1, 2015, and its exchange rate arrangement changed from a currency board to free floating. Lithuania is the 19th member of the European Economic and Monetary Union (EMU).

  • Soft pegs: Recurring pressures on the currencies of many emerging market economies as a result of capital flow volatility may have contributed to an overall shift toward increased exchange rate management since 2008. The number of countries with soft pegs has increased by 38.5 percent since its lowest level in 2009, with most of the additions in stabilized and crawl-like arrangements (Table 3). Countries with soft pegs represent the single largest exchange rate arrangement category—equal to the combined number of hard pegs and floating arrangements and accounting for 47.1 percent of all members.

  • Conventional pegs: The number of countries in this category remained at 44, with only two changes: (1) Libya, which has a de jure conventional peg, followed an appreciating trend against the Special Drawing Right (SDR) for more than six months in the reporting period, and thus it was reclassified to a crawl-like arrangement; and (2) Iraq was reclassified retroactively to a conventional peg regime following the publication of the Central Bank of Iraq’s exchange rate policy maintaining the dinar peg to the U.S. dollar since January 2012. Among conventional peg arrangements, the largest share is the soft pegs, with 48.9 percent.

  • Stabilized arrangements: The number of countries with stabilized arrangements increased by 1, to 22. There were nine changes in this category between April 2014 and April 2015, with the majority involving reclassification from the residual category other managed (Cambodia, Costa Rica, Czech Republic, Islamic Republic of Iran, Mauritania). Four countries moved to other soft peg categories, three to crawl like (Angola, Islamic Republic of Iran,9 Tajikistan), and one to conventional peg (Iraq). The large number of changes involving other soft pegs may reflect the tendency of countries with such arrangements to change the way they manage their exchange rate in response to events in the external environment, including differences in inflation across countries, capital flow pressures, and new trends in world trade. The category stabilized arrangement remained the second largest among the soft pegs, with 24.5 percent.

  • Crawl-like arrangements: The number of countries with these arrangements increased by 5, to 20. While one country left this category, six countries moved into it. The number of crawl-like arrangements has increased significantly since 2008, which may indicate more one-sided interventions to control depreciation or appreciation exchange rate pressure. One country, Honduras, was reclassified as a crawling peg, because the statistical data on the exchange rate confirmed the de jure exchange rate arrangement. The six countries reclassified to a crawl-like arrangement were Libya (previously conventional peg); Angola, Islamic Republic of Iran, and Tajikistan (previously stabilized); Papua New Guinea (previously floating); and Rwanda (previously other managed). All six intervened heavily, significantly reducing their reserves to counter depreciation pressure during the reporting period. Notwithstanding large foreign exchange market interventions, Tajikistan experienced a 30 percent depreciation of the somoni. Similarly, Angola, Libya, and Papua New Guinea faced a 9 percent (average) depreciation of their currencies from January 2014 to April 2015 despite a decline in their reserves by 25 percent (average).

  • Pegged exchange rates within horizontal bands: Only Tonga has this arrangement. Two additional countries have de jure pegged exchange rates within horizontal bands, but one has a de facto stabilized arrangement (Maldives) and the other a de facto other managed arrangement (Syria).

  • Floating arrangements: The number of countries with floating arrangements increased by 1, to 37, and there were also three changes in the composition of the group. Two countries entered this category. Both of them (The Gambia, Russia) previously had other managed arrangements. One country (Papua New Guinea) moved from floating to a crawl-like arrangement in this reporting period.

  • Free floating: The number of countries with free-floating arrangements increased by 1, to 30. The only change registered in this category was Lithuania (previously currency board), which was reclassified as free floating when it joined the EMU on January 1, 2015.

Monetary Anchors10

The exchange rate remained the anchor for monetary policy for fewer than half of member countries—45.5 percent (Table 5). There were two changes in official monetary anchors11 compared with three in the previous reporting period: Kazakhstan left the group of countries anchored to the U.S. dollar (42), and Lithuania joined the EMU and left the group of members anchored to the euro (25). The number of members anchored to another single currency (8) and to a composite (12) remained the same (see Table 2).

Fifty-six member countries have an officially announced fixed exchange rate policy—either a currency board or a conventional peg—which implies the use of the exchange rate as the unique monetary anchor, with one exception. Although the official (de jure) exchange rate regime of the Solomon Islands is a peg against a basket of currencies, the monetary policy framework was reported to comprise a mix of anchors, including the exchange rate. Among the 67 countries with de facto floating exchange rate arrangements—floating or free floating—the monetary anchor varies among monetary aggregates (10), inflation targeting (32), and other (25, including the 19 EMU countries). Fifteen countries implementing soft pegs and other managed arrangements target monetary aggregates. Countries with either stabilized or crawl-like arrangements (42) report reliance on a variety of monetary frameworks, including monetary aggregates and inflation-targeting frameworks. Other managed arrangements are split between exchange rate anchors (3), monetary aggregate targets (2), and other monetary policy frameworks (5).

  • The share of IMF members with the exchange rate as the main policy target continued to decrease from 46.6 percent to 45.5 percent. Countries with hard pegs or conventional pegs make up three-quarters of this group. Three currency unions—the Central African Economic and Monetary Community (CEMAC), Eastern Caribbean Currency Union (ECCU), and West African Economic and Monetary Union (WAEMU)—have exchange rate anchors for their respective common currency. However, these countries account for less than 20 percent of global output and world trade. Exchange rate anchors are by far the first choice of small, open economies.

  • The U.S. dollar maintained its position as the dominant exchange rate anchor. The share of countries using the U.S. dollar as an exchange rate anchor decreased slightly to 22.0 percent due to a change in Kazakhstan’s monetary policy framework to “other.” With this change, the share of countries using the U.S. dollar as exchange rate anchor has continued its steady decline. Countries that continue to anchor to the dollar also include those with moderate trade relations with the United States.

  • The share or composition of countries using an exchange rate anchor to the euro decreased to 13.1 percent when the currency of Lithuania changed from the litas to the euro on Lithuania’s entry to the EMU in January 2015. Countries whose currencies are anchored to the euro generally have historical ties with European countries—for example, the Communauté Financière d’Afrique (CFA) franc area countries—are part of the European Union (EU), or have strong trade relations with western Europe, including central and eastern European countries, such as Bulgaria, the former Yugoslav Republic of Macedonia, Montenegro, and San Marino.

  • Twelve countries anchor their exchange rate to a currency composite. Three track the SDR as the sole currency basket or as a component of a broader reference basket (Botswana, Libya, Syria). Morocco tracks a euro and U.S. dollar basket; Tonga tracks a composite that includes the Australian and New Zealand dollars in combination with major global currencies (Japanese yen and U.S. dollar); and the remaining seven countries do not disclose the composition of their reference currency baskets (Algeria, Fiji, Islamic Republic of Iran, Kuwait, Samoa, Singapore, Vietnam).

  • The number of countries with an exchange rate anchor to another single currency remained unchanged (8). Two of these countries (Kiribati, Tuvalu) use the Australian dollar as their legal currency, and one (Brunei Darussalam) has a currency board arrangement with the Singapore dollar. The remaining five have conventional pegged arrangements: three (Lesotho, Namibia, Swaziland) with the South African rand and two (Bhutan, Nepal) with the Indian rupee. Half the countries in this group are landlocked, bordering either partially or exclusively the country whose currency they use as their exchange rate anchor. The anchor currency is typically freely usable in the country and is often legal tender.

Most IMF member countries, representing the overwhelming share of global output, are split among monetary aggregate targeting, inflation targeting, and other (which includes monetary policy not committed to a specific target).

  • The number of countries targeting a monetary aggregate remained unchanged at 25, compared with the previous reporting period. However there were four changes: two countries switched from monetary aggregate targeting to “other monetary framework” (Kenya, Papua New Guinea); and two (Belarus and Bolivia—both previously anchored to the U.S. dollar) started to target a monetary aggregate. This category does not include any country with a free-floating exchange rate arrangement. In fact, monetary aggregates are often the choice of economies with less-developed financial markets and managed exchange rates. The objective of the arrangement is to influence consumer prices and, eventually, asset prices through the control of monetary aggregates. Reserve money is often used as the operational target to control credit growth through the credit multiplier.

  • The number of countries that directly target inflation increased by 2, to 36. India agreed to a new monetary policy framework with its government in February 2015 and switched to an inflation-targeting framework (previously classified as other monetary framework). Russia changed to an inflation-targeting framework in January 2015, in accordance with the key elements of the Uniform State Monetary Policy for 2015–17. The countries in this group are mostly middle income but include some advanced economies as well. Of these, 32 have either floating or free-floating exchange rate arrangements, a policy framework that requires considerable monetary policy credibility to make up for the loss of transparent intermediate targets.12 A few countries refer to their monetary framework as “inflation targeting light,” suggesting that they also consider indicators other than inflation. Jamaica, Kazakhstan, Kenya, and Tunisia have taken preliminary steps toward a transition to an inflation-targeting framework.

  • Since 2008, the “other monetary policy framework” category has increased from 12 to 43, largely exceeding the 30 percent decline in countries anchored to the U.S. dollar and the 18 percent decline in countries targeting inflation. The number of countries that are not committed to a specific target (the “other” column in Table 2) also remained unchanged, despite eight changes in the reporting period. Four countries (Kazakhstan, Kenya, Lithuania, Papua New Guinea) reported the use of a multiple-indicator approach to monetary policy, and four countries left this group: Belarus and Bolivia adopted a monetary aggregate target framework, while India and Russia switched to targeting inflation. This category includes many of the largest economies, such as the euro area and the United States, where the monetary authorities have sufficient credibility to implement monetary policy without a specific monetary anchor. It is also used as a residual classification for countries for which no relevant information is available and for those with alternative monetary policy frameworks not categorized in this report.

Foreign Exchange Interventions

The IMF staff regularly assesses whether the frequency of foreign exchange intervention is consistent with de facto free-floating arrangements or determines whether a classification as a soft peg is appropriate (see the Compilation Guide).13 These assessments draw on information that is publicly available and also on information made available to the IMF through self-reporting, various market reports, and significant changes in some members’ foreign exchange reserves and other sources, including during official staff visits to member countries. This section summarizes developments in foreign exchange interventions since January 1, 2014, some of which are also depicted in Tables 6 and 8.a.

Intervention Purpose

As discussed in the April 2015 Global Financial Stability Report, volatility in major exchange rates has increased more than during any similar period since the global financial crisis. The U.S. dollar has strengthened against major currencies, such as the euro and yen, which depreciated significantly in 2014. Currencies of emerging market economies were heavily affected by capital flow volatility in the reporting period. Against this backdrop, central banks have intervened heavily to counter rapid depreciation or appreciation pressures on their local currency. Seventy-nine percent of de facto exchange rate arrangement reclassifications between May 1, 2014, and April 30, 2015, were the result of increased exchange rate management by central banks.

In some countries, exchange rate pressure reflects domestic conditions rather than the global environment. Faced with significant volatility against the backdrop of political protests and unwarranted changes in the lira exchange rate, Turkey initiated unsterilized foreign exchange interventions early in 2014, which resulted in a rapid loss of international reserves. In April 2014, the daily foreign exchange selling auction amount decreased from a minimum of US$50 million to US$40 million as a result of improvement in the current account deficit. This amount was further reduced in May 2014 to US$20 million and to US$10 million in July 2014 because of favorable developments in the balance of payments, but it was returned to US$40 million in the last quarter of 2014 when increased volatility was observed in the exchange rate and stayed at this level until the end of 2014. The Central Bank of the Republic of Turkey (CBRT) intervenes directly or through flexible auctions in the market in both directions, if there is unhealthy price formation due to speculative behavior stemming from a loss of market depth. In such cases, the CBRT may buy or sell foreign exchange at the rates quoted by the banks directly. Since February 2015, the minimum amount of the auction for the following day is announced by the CBRT at 5:20 p.m. Further, on days when it is deemed necessary due to excessive volatility in the exchange rates, the foreign currency amount offered for sale may be raised up to 50 times the announced minimum. Leaning the other way, Israel announced in December 2014 that it would purchase US$3.1 billion in 2015 in the foreign exchange market to offset the effect of natural gas production on the exchange rate. The Bank of Israel purchased US$7 billion in the foreign exchange market during 2014 (US$5.3 billion in 2013).

Intervention Techniques

IMF members typically conduct foreign exchange interventions in the spot foreign exchange market either by directly contacting market participants (all or only a selection; for example, market makers) or through foreign exchange auctions. (For more information on auctions see the Foreign Exchange Markets section.) However, foreign exchange interventions are occasionally also conducted in the forward or options markets or through verbal interventions.

Following heavy interventions at the beginning of 2014, Russia eliminated its exchange rate corridor and canceled regular foreign exchange interventions, increasing the flexibility of the ruble. During the first quarter of 2014, capital outflows persisted, spurred by expectations of continuing ruble depreciation. The onset of geopolitical tensions raised the ruble pressure considerably, and the Bank of Russia (BR) sharply increased net interventions, which reached US$26 billion for the month of March, almost matching the US$27 billion in net interventions for all of 2013. Moreover, in response to significant currency pressures in early March, the BR lowered the flexibility of its foreign exchange rule. It increased more than fourfold, to US$1.5 billion, the cumulative intervention required to move the exchange rate corridor. Starting in June 2014, the BR implemented several changes in its intervention policy to gradually revert to more flexibility. In June, it reduced the intervention threshold to US$1 billion, eliminated the US$100 intervention subband, and reduced the amount of interventions in the remaining subband from US$300 to US$200. In June 2014, the volume of interventions aimed at smoothing fluctuations in the ruble’s exchange rate in all subbands of the operational band was reduced by US$100 million. In August 2014, the operational band was widened to Rub 9 from Rub 7, and the volume of interventions aimed at smoothing fluctuations in the ruble’s exchange rate in all subbands of the operational band was set at zero. The amount of cumulative intervention was reduced from US$1 billion to US$350 million. Finally, in November 2014, the BR eliminated its exchange rate corridor and canceled regular foreign exchange interventions.

Similarly, Guatemala widened the fluctuation margin, triggering interventions from 0.65 percent to 0.7 percent. The Bank of Guatemala may also intervene on a discretionary basis whenever the nominal exchange rate shows unusual volatility.

Public announcements, which could be considered verbal intervention, have also been used to guide the foreign exchange market—for example to prevent the exchange rate from exceeding a certain limit. The Czech Republic maintained its intention to weaken the koruna as announced in November 2013, keeping the exchange rate against the euro close to CZK 27. The commitment is asymmetric; the Czech National Bank does not intervene to strengthen the currency toward the level of CZK 27. This measure aims to reach the inflation target in the face of a near-zero policy rate. Since then, the koruna has traded between CZK 27.0 and CZK 28.33 per euro. In contrast, on January 15, 2015, the Swiss National Bank surprised the financial markets by announcing its decision to discontinue the minimum exchange rate floor of CHF 1.20 per euro—originally set in September 2011—which resulted in a two-day appreciation of about 18 percent.

Several countries took important steps toward increased flexibility of the exchange rate and reduced intervention. China widened the floating band of the renminbi’s trading prices against the U.S. dollar in the interbank foreign exchange market. Since then, the People’s Bank of China has largely withdrawn its usual foreign exchange interventions, letting market supply and demand have a greater effect on the exchange rate. Belarus made the transition to a more flexible exchange rate policy that calls for minimizing currency interventions over the medium term while limiting daily volatility in the value of the currency basket.

Costa Rica developed a new foreign currency management strategy for the nonbank public sector, according to which the Central Bank of Costa Rica (1) will directly meet the nonbank public sector’s net daily foreign currency requirements by drawing on its international reserves; and (2) will replenish this foreign currency through participation in the foreign exchange market (Monex) on the basis of the central bank’s macroeconomic program and the prevailing conditions in the Monex (seasonal trends in private sector foreign currency flows).

The former Yugoslav Republic of Macedonia adopted a new decision on the manner and terms for buying and selling foreign currency. The decision specifies the criteria for selecting market makers in the foreign exchange market. Although the decision stipulates that the National Bank of the Republic of Macedonia may trade foreign currency only with market makers, if there are larger imbalances between supply and demand, the central bank may buy and sell foreign currency with all banks.

Official Exchange Rates

The vast majority (167) of IMF member countries report publishing official exchange rates. This includes not only countries that have officially determined and/or enforced exchange rates; by definition it also refers to any reference or indicative exchange rate that is computed and/or published by the central bank (see the Compilation Guide). The calculation of such exchange rates is often based on market exchange rates, such as exchange rates used in interbank market transactions or in a combination of interbank and bank-client transactions in a specified observation period. The published exchange rate is used as a guide for market participants in their foreign exchange transactions, for accounting and customs valuation purposes, in exchange transactions with the government, and sometimes mandatorily in specific exchange transactions.

During the 2014–15 reporting period, Argentina left the group of countries reporting an official exchange rate, and Somalia indicated plans to resume exchange rate setting in the future. Several countries adopted new methods for calculating their official exchange rates (China, Ghana, Iraq, Serbia, Solomon Islands, Ukraine), while Venezuela introduced a third official exchange rate, SICAD II, which was later replaced by a new platform SIMADI (see Table 8a). Countries from all income levels and various geographic regions are represented among the 26 members that report no official or reference exchange rates; about half (12) are countries with no separate legal tender, 4 are soft pegs, 7 are floating or free floating, and 3 have the residual de facto exchange rate arrangement. Among the countries that do not compute an official exchange rate, some, including Argentina, Japan, Peru, and Singapore, publish the market-determined rates on their monetary authority’s website to promote information transparency.

Foreign Exchange Markets

The modernization of foreign exchange market structures and the expansion of use of forward transactions continued during 2014 and through July 2015, although there were only minor changes in the reported foreign exchange market structure of members (Table 7). There was a decline in the number of countries with a foreign exchange standing facility (by 1) as foreign exchange markets developed and market-based arrangements increased, but also an increase in the number of countries with central bank auctions (by 3), reflecting volatile global and internal market conditions. Other noteworthy developments include an increase in the number of countries with over-the-counter interbank markets (by 5) and a decrease in those with interbank markets based on market makers (by 1). The number of countries with a forward foreign exchange market increased by 3, to 130. Resumed reporting by Somalia contributed to the increase in the number of members with spot and interbank market foreign exchange markets. Table 8.a includes detailed descriptions of changes concerning foreign exchange market arrangements.

Foreign Exchange Standing Facility, Allocations, Auctions, and Fixing

More than half of IMF member countries (118) report some type of official central bank facility in the spot foreign exchange market—no overall change from the previous year—with The Gambia and Tunisia joining and Latvia and Lithuania leaving this group. Central banks may provide access to foreign exchange to market participants through a standing facility, allocation to certain market participants, or purchase and sale of foreign exchange through auctions or fixing sessions. Among other developments in this area during the reporting period, Mexico and Ukraine resumed interventions through auctions, Russia introduced repo auctions, and the Bank of Sierra Leone moved from the weekly foreign exchange retail auction to a weekly wholesale foreign exchange auction system.

  • Foreign exchange standing facilities: Almost two-thirds of members with foreign exchange markets fully or partially operated by the central bank reported maintaining a foreign exchange standing facility (74), a reduction of 1 (Paraguay) that continues a downward trend that started in 2011. Such a facility allows market participants to buy foreign exchange from or sell it to the central bank at predetermined exchange rates and is usually instrumental in maintaining a hard or soft peg arrangement. The credibility of such arrangements depends to a large extent on the availability of foreign exchange reserves backing the facility. The countries with foreign exchange standing facilities include all those with currency boards (11); conventional pegs, with the exception of South Sudan and Venezuela (42); crawling pegs (2); or a pegged exchange rate within horizontal bands (1). South Sudan, as a newly independent country with a de jure conventional peg exchange rate regime, has a nascent foreign exchange market and is in the process of developing its central bank operations. In Chad, where the Bank of Central African States’ over-the-counter exchange transactions were previously conducted exclusively with national public accountants and treasuries, commercial banks may now acquire euro notes at 1.5 percent from the central bank. During the reporting period, Russia, which has a floating arrangement, introduced a standing facility; the Bank of Russia adopted a decision to perform foreign exchange swap operations involving the sale of U.S. dollars for rubles and publishes the parameters of these operations on its website. Turkey (also a floater) reduced the lending rates on the central bank’s one-week-maturity borrowing from the last-resort and standing facilities. The remaining 18 countries with foreign exchange standing facilities are those with stabilized arrangements (9), with other managed arrangements (3), or whose foreign exchange markets are less developed. Four countries reported the elimination of their foreign exchange standing facilities: Latvia and Lithuania, after they joined the EMU, and Paraguay and Venezuela. The Central Bank of Costa Rica, to smooth foreign exchange market volatility after a depreciation episode in early 2014, decided to meet the nonbank public sector’s net daily foreign currency requirements directly by drawing on its international reserves, and replenishing them through participation in the foreign exchange market.

  • Foreign exchange auctions: There was an increase (by 3) in the number of countries holding official foreign exchange auctions (35). In a significant majority of those countries (28) foreign exchange auctions are the only mechanism operated by central banks. More than half of the countries in this category are floaters: 18 have exchange rate regimes classified as floating (nearly half of the countries with this classification) and 1 as free floating (Mexico). Six have de facto stabilized arrangements, 5 crawl like, and 3 other managed. Auctions are also used to influence exchange rate volatility rather than solely to manage foreign reserves. For example, Mexico resumed its auctions, which are now daily, with a minimum exchange rate equivalent to the reference rate of the preceding business day in accordance with Banco de Mexico provisions, plus 1 percent (previously 1.5 percent). Thus, the auction results in assignment only if the exchange rate depreciates at least 1 percent between sessions. Mexico also conducted daily auctions of US$52 million with no minimum price starting March 11, 2015, in order to increase foreign exchange liquidity after a decline in the value of the peso. The auctioned amount was increased to US$200 million starting July 31, 2015. For similar reasons, Turkey held foreign exchange selling auctions with amounts set on a daily basis, depending on the conditions in the foreign exchange market. The foreign currency amount for sale may be raised up to 50 times (previously 10 times) the announced minimum in case of excessive exchange rate volatility. The Bank of Russia added repo auctions in U.S. dollars and euros with maturities of 7 days, 28 days, and 12 months to the set of instruments for providing foreign exchange and introduced credits in foreign currency backed by rights of claim on credits in foreign currency with maturities of 28 and 365 calendar days. Ukraine held multiple price auctions (following a hiatus since February 18, 2010) between September 8, 2014, and February 5, 2015, and changed some of the operational rules several times during this period, adjusting them to rapidly evolving market conditions. Venezuela started using the exchange rate resulting from the last allocation of foreign currency performed through the Complementary System to the Administration of Foreign Exchange as a reference exchange rate that applies to the settlement of foreign currency in certain operations, while Trinidad and Tobago relaxed the rules for resale of foreign exchange acquired in auctions. The Bank of Sierra Leone moved from a weekly foreign exchange retail auction to a weekly wholesale foreign exchange auction system of noncash foreign exchange for the payment of the importation of goods. Under the wholesale auction system, individuals no longer submit bids for participation in the auction; commercial banks submit bids on their own behalf for subsequent sale to their customers. The Gambia reported conducting auctions by written invitation or solicitation for sealed written bids addressed to all banks, and Tunisia reported currency swaps through auctions at the initiative of the Central Bank of Tunisia.

  • Foreign exchange allocation systems: The number and composition of countries with allocation systems remained the same. Most of the countries (21) with allocation systems also rely on other mechanisms operated by their central banks. Foreign exchange allocation is often used to provide foreign exchange for strategic imports, such as oil or food, when foreign exchange reserves are scarce. Given South Sudan’s nascent foreign exchange market, the Bank of South Sudan attempts to clear the foreign exchange market through weekly allocations under the nominal anchor of the fixed exchange rate. It currently provides foreign exchange only for public services, such as medical, travel, and study needs, and these are subject to weekly or currency-specific limits. In addition, a special foreign exchange facility applies to essential imports. During the reporting period, Iraq introduced one tightening and one easing measure with respect to banks’ purchases of foreign exchange at the Central Bank of Iraq currency selling window, and Bangladesh increased the limit on foreign exchange funds called “export development funds” for exporters’ import obligations (easing).

  • Fixing sessions: This arrangement is more characteristic of an early stage of market development, when they help establish a market-clearing exchange rate in a shallow market with less-experienced market participants. The number of countries holding such sessions remained the same, but only Belarus and Mauritania continue to do so on a regular basis. As a major conduit for foreign aid flows, Mozambique’s central bank channels foreign exchange into the market by holding selling sessions with authorized banks via its software platform. Serbia retains the option of using fixing sessions when necessary to stabilize the foreign exchange market. The Islamic Republic of Iran and Syria indicate that they hold fixing sessions, the extent and regularity of which are unknown.

Interbank and retail foreign exchange markets

The number of countries that reported a functioning interbank market increased by 1, to 162, with Somalia reporting the existence of such a market following resumption of official communication with the IMF. The main types of interbank markets in these countries include over-the-counter markets, brokerage arrangements, and market-making arrangements. Thirty-five members allow operation of all three types of systems. Of the 162 countries with a functioning interbank market, more than four-fifths (132), five more than in the previous year, operate over the counter: 70 of those operate exclusively over the counter, 74 employ a market-making arrangement, and 50 allow for intermediation by brokers. Eight members reported an inactive interbank market, an increase of 2 from the previous reporting period.

  • Over-the-counter operations: These account for the majority of interbank markets (132) because in a number of economies, particularly small economies, market participants cannot undertake the commitments involved in being a market maker. Over-the-counter foreign exchange markets operate in developed economies as well, where the market is sufficiently liquid to operate without the support of specific arrangements or institutions. Brunei Darussalam, Estonia, The Gambia, Guatemala, and Zimbabwe joined this group, in part due to improved reporting. During the reporting period, Belarus eased the limits on transactions involving the purchase and sale of foreign currency in the over-the-counter market between a bank and a business entity, raising them from 1,000 currency units to 20,000 currency units. On December 19, 2014, a temporary ban was imposed on the purchase and sale of foreign currency in the over-the-counter market. All foreign currency purchase and sale transactions had to be performed in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company. The measure was partially lifted February 20, 2015, but the supply of and demand for foreign currency by business entities continues to be met primarily through trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company.

  • Brokerage arrangements: There was no change in the number or composition of countries that reported using brokers since the previous reporting period. During the reporting period, Korea allowed spot foreign exchange transactions between security brokerages. In the Philippines, thrift banks authorized to issue foreign letters of credit and pay, accept, and negotiate import and export drafts and bills of exchange were allowed to apply for Type 2 derivatives authority to operate as a dealer, broker, and end-user of deliverable foreign exchange forwards subject to certain conditions.

  • Market-making agreements: Seventy-four members reported using market-making agreements in the interbank market, a decrease of one from the previous reporting period. This form of market arrangement is used both in developed economies (including Switzerland) and developing economies (including Zambia) and across all types of exchange rate arrangements. During the reporting period, in Korea, where previously there were no designated market makers in the spot foreign exchange market, 12 foreign exchange banks were temporarily designated as market makers to launch the won-yuan spot foreign exchange market. Cyprus left the group of countries with market-making agreements, as did Denmark, whose voluntary market-making agreement between banks in the euro-krone market was dissolved. Previously, six banks carried out market-making agreements directly with each other in the absence of an official licensing institution. The former Yugoslav Republic of Macedonia adopted a decision stipulating that the National Bank of the Republic of Macedonia may trade foreign currency only with market makers, but that if there are larger imbalances between supply and demand, the central bank may buy and sell foreign currency with all banks. It subsequently reduced market makers’ maximum bid-ask spread on quotes with each other and increased the minimum size of a transaction between a market maker and the central bank in the foreign exchange market maker segment. In Tunisia, an electronic bank interlinking platform, a market-making agreement, and the designation of foreign exchange market makers were introduced.

Most member countries (169) report a framework for the operation of foreign exchange bureaus, with the majority imposing some type of licensing requirement. However, there are no bureaus in operation in some of these countries. An equal number of easing and tightening changes affected exchange bureaus during the reporting period. Ghana imposed a per-transaction limit on foreign exchange bureau transactions (US$10,000), while the Central Bank of Suriname issued guidelines on licensing and minimum capital requirements of money transaction offices. Jordan gave money exchange companies one year to reconcile their positions with the new paid-up-capital requirements. As part of a comprehensive program to stabilize the domestic financial system, Ukraine implemented a series of tightening measures: it decreased the limits on daily foreign currency cash purchases and discontinued required registration of exchange offices by the regional offices of the National Bank of Ukraine. In Cyprus, foreign exchange bureaus were allowed to operate with Central Bank of Cyprus approval, and Sri Lanka allowed authorized money changers to deal in all foreign currencies (previously only designated currencies). The former Yugoslav Republic of Macedonia further liberalized the operations of exchange bureaus by cancelling repurchases and unifying the conditions for selling foreign exchange to residents and nonresidents.

A series of easing measures were introduced in a number of member countries that expanded the scope of operation of financial intermediaries. In the Philippines, thrift banks, rural banks, and cooperative banks were allowed to buy and sell foreign exchange subject to compliance with foreign exchange rules and regulations. Colombia established regulations for foreign currency clearing and settlement systems and their operators in order to strengthen risk management in this area. In contrast, Ghana strictly prohibited offshore foreign exchange deals by resident and nonresident companies, including exporters and nonresident banks, in order to reduce foreign exchange market pressure by enhancing the repatriation of foreign exchange earnings and the use of the domestic currency.

Although the majority of members refrain from restricting exchange rate spreads and commissions in the interbank market, several countries imposed new or additional restrictions in this area. Tajikistan introduced significant administrative restrictions on foreign exchange trading, including a maximum exchange rate banks may use with their customers, and the closure of non-bank-owned cash foreign exchange kiosks (about half of all cash exchange points in the country). Papua New Guinea introduced an exchange rate trading band. On the easing side, China eliminated the bid-ask spread for renminbi–U.S. dollar spot transactions, allowing banks to base their exchange rate quotes on supply and demand in the market. Egypt also eased the limits on the bid-ask spreads in the interbank and spot markets (except for banknotes) after they were progressively tightened during the previous reporting period.

There were several other developments. To contain foreign exchange market pressure, in April 2015 Ukraine introduced limits on a bank’s daily net foreign exchange purchase in the interbank and retail market for its own position, except purchases of foreign exchange received from foreign investors to increase banks’ authorized capital. On the easing side, with respect to currency pricing, China further widened the interbank renminbi–U.S. dollar trading fluctuation band from ±1 percent to ±2 percent around the central parity released on the same day by the China Foreign Exchange Trade System. In the interbank market, direct trading of the renminbi was launched in China against the euro, pound sterling, New Zealand dollar, Kazakhstani tenge, and Singapore dollar, while the Solomon Islands widened the U.S. dollar–Solomon Islands dollar spread for commercial banks, the interbank U.S. dollar and Australian dollar margins, and the spread for transactions with the Central Bank of the Solomon Islands. In Lithuania, on adoption of the euro, foreign exchange operations are no longer limited to Bank of Lithuania–licensed credit institutions; any legal person may engage in such operations with the central bank’s permission.

Other Measures

Most of the changes in other measures during the reporting period refer to forward and swap operations (Table 8.a), exchange rate structure (Table 8.b), and taxes and subsidies on foreign exchange transactions (Table 8.c).

  • Forward and swap operations: There was continued easing of forward transactions. Lao P.D.R. joined the group of countries with a forward market when banks were allowed to enter into kip and foreign exchange forward contracts with maturities of 7 days, 14 days, 3 months, 6 months, and 1 year. India expanded authorized dealers’ ability to provide forward exchange cover to qualified foreign investors up to the market value of their investments in equities and/or debt in India as of a particular date. It allowed foreign portfolio investors access to the domestic exchange-traded currency derivatives market for hedging currency risk from the market value of their exposure to Indian debt and equity securities and let them take positions in certain rupee-currency pairs. India also increased the limit on outstanding forward contracts of importers and exporters booked on the basis of past performance. The Philippines allowed thrift banks authorized to issue foreign letters of credit and pay, accept, and negotiate import and export drafts and bills of exchange to apply for Type 2 derivatives authority to operate as a dealer, broker, and end-user of deliverable foreign exchange forwards subject to certain conditions. Fiji increased the limit on banks’ net forward sales contracts. Colombia, where derivatives operations are limited to reserve currencies, added several currencies to the list of currencies eligible for derivatives transactions (renminbi, Hong Kong dollar, Singapore dollar, won) and allowed the relevant exchange market intermediaries to offer financial derivatives linked to the exchange rate, provided they are cleared and settled through a central clearinghouse of the counterparty authorized by the Financial Superintendency. The Central Reserve Bank of Peru began participating in foreign exchange swap auctions with financial institutions. In Indonesia, derivatives transactions were allowed, subject to certain conditions, to be settled by netting for the purpose of rollover, early termination, and unwinding of the initial derivative transaction, and the scope of operations that are acceptable as underlying transactions for derivatives transactions was expanded. All derivatives contracts of foreign currency against rupiah offered by domestic banks to nonresidents with a nominal value exceeding US$1 million must be based on an underlying local investment activity. Exceptions to the overwhelmingly easing trend were Ukraine, where banks were prohibited from entering into derivatives transactions on the stock exchanges, and limits were introduced on banks’ daily net foreign exchange purchases in the interbank market for their own position for forward, among other (excluding swap), transactions, and Argentina, where forward positions were limited to 10 percent of regulatory capital. Tajikistan reported having a forward exchange market.

  • Exchange rate structure: There were several changes in the number of countries maintaining a dual or multiple exchange rate structure (see Table 8.b). Currently, 24 countries are classified as having more than one exchange rate, of which 13 are dual and 11 multiple. This is a result mainly of specific exchange rates applied for certain transactions or actual or potential deviations of more than 2 percent between official and other exchange rates. Myanmar abolished the use of foreign exchange certificates as part of its plan to liberalize its foreign exchange regime and remove its multiple exchange rate structure. Belarus took steps to improve its multiple exchange rate structure, as did Ghana and Ukraine (both with dual structure) with respect to the calculation of their reference/official exchange rates. In contrast, Argentina reinstated the requirement to sell proceeds to the central bank at the reference rate on the date of sale or on the day the sale should have taken place, whichever is less favorable, for payments for imports pending official customs entry and exporters who fail to sell their export proceeds within the prescribed time period. Venezuela’s exchange rate structure changed from dual to multiple with the introduction of a third official foreign exchange market rate (SICAD II) with a more depreciated exchange rate vis-à-vis the other two, which was later replaced by a new platform, SIMADI, that expanded participation in foreign exchange transactions to individuals and legal entities operating in any economic sector. Finally, a series of neutral changes were recorded. Latvia and Lithuania adopted the euro; Zimbabwe announced the adoption of four additional official currencies: the Australian dollar, Chinese renminbi, Indian rupee, and Japanese yen; and Ecuador announced that electronic currency is placed in circulation exclusively by the Central Bank of Ecuador, backed by its liquid assets. In Croatia, the Consumer Credit Act was amended with a view to freezing for one year from the date of implementation the kuna–Swiss franc exchange rate at HRK 6.39 per Swiss franc (the rate before the Swiss National Bank abandoned its minimum Swiss franc–euro rate). This applies to repayment of Swiss franc loans and kuna loans with a Swiss franc currency clause undertaken prior to this date.

  • Taxes and subsidies on foreign exchange transactions: There were slightly more easing (5) than tightening (4) changes with respect to foreign exchange subsidies and taxes (see Table 8.c), most of which were made by Belarus and Ukraine. Overall, 32 emerging market and developing economies (the same as the previous year) tax foreign exchange transactions. In a bid to reduce depreciation pressures on the Belarusian rubel, Belarus, on December 20, 2014, imposed a temporary tax of 30 percent payable by banks on the purchase of foreign currency in trading sessions of the Belarusian Currency and Stock Exchange Open Joint-Stock Company. The tax was reimbursed to banks by organizations and individual entrepreneurs on whose behalf the foreign currency was acquired in the trading sessions. The tax was gradually reduced and ultimately repealed as of January 8, 2015. Ukraine levied a 0.5 percent foreign exchange tax on all cash and noncash foreign exchange purchases (net of transaction fees) by residents and nonresidents for the twofold objective of increasing tax revenues and discouraging capital outflows during a time of political and economic turbulence. The tax was subsequently increased to 2 percent on individuals’ foreign currency cash purchases but was eliminated on other foreign exchange purchases. In response to changes in capital inflows, Brazil continued to take steps that ease the taxing of foreign-exchange-related transactions. In Aruba, commercial banks are now required to pay a fee to the Central Bank of Aruba on all sales of foreign currency to the public, both cash and noncash, amounting to 3/8 percent of the florin equivalent of these sales. The Central Bank of Aruba will pay a fee to the commercial banks on all purchases of foreign currency from the public, both cash and noncash, amounting to 1/8 percent of the florin equivalent of these purchases. In contrast to the broad use of foreign exchange taxes, only three countries have foreign exchange subsidies in place: the Islamic Republic of Iran, Serbia, and Venezuela. In Serbia, the subsidies target certain agricultural and food industry exports; in Iran, the official rate is used for imports of priority goods and services; and in Venezuela, items associated with imports of essential goods and services, remittances to students and retirees, special health-related cases, sports, and other items are settled at the exchange rate of Bs 6.30 per U.S. dollar (Exchange Agreement No. 14).

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