Chapter

Overview

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2015
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This is the 66th issue of the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), which provides a yearly description of the foreign exchange arrangements, exchange and trade systems, and capital controls of all IMF member countries.1 The AREAER reports on restrictions in effect under Article XIV, Section 2, of the IMF’s Articles of Agreement in accordance with Section 3 of Article XIV, which mandates annual reports on such restrictions.2 It also provides information related to Paragraph 25 of the 2012 Integrated Surveillance Decision, which restates the obligation of each member country under the IMF’s Articles of Agreement to notify the IMF of the exchange arrangement it intends to apply and any changes in that arrangement.3

The AREAER goes beyond these, however, to provide a comprehensive description of global exchange and trade systems. It describes restrictions on current international payments and transfers and multiple currency practices (MCPs) maintained under Article XIV of the IMF’s Articles of Agreement as well as those subject to the IMF’s jurisdiction in accordance with Article VIII, Sections 2(a) and 3.4 The report also provides information on the operation of foreign exchange markets, controls on international trade, controls on capital transactions, and measures implemented in the financial sector, including prudential measures. In addition, the AREAER reports on exchange measures imposed by member countries solely for national and/or international security reasons, including those notified to the IMF in accordance with relevant decisions by the IMF Executive Board.5

The AREAER also provides detailed information on the exchange rate arrangements of member countries: the de jure arrangements as described by the countries and the de facto exchange rate arrangements, which are classified into 10 categories (Table 1). This classification is based on the information available on members’ de facto arrangements, as analyzed by the IMF staff, which may differ from countries’ officially announced (de jure) arrangements. The methodology and the characteristics of the categories are described in the Compilation Guide included in this report.

Table 1.Classification of Exchange Rate Arrangements
TypeCategories
Hard pegsExchange arrangements with no separare legal tenderCurrency board arrangements
Soft pegsConventional pegged arrangementsPegged exchange rates within horizontal bandsStabilized arrangementsCrawling pegsCrawl-like arrangements
Floating regimes (market-determined rates)FloatingFree floating
ResidualOther managed arrangements
Note: This methodology became effective on February 2, 2009, and reflects an attempt to provide greater consistency and objectivity of exchange rate classifications across countries and to improve the transparency of the IMF’s bilateral and multilateral surveillance in this area.
Note: This methodology became effective on February 2, 2009, and reflects an attempt to provide greater consistency and objectivity of exchange rate classifications across countries and to improve the transparency of the IMF’s bilateral and multilateral surveillance in this area.

Several tools help navigate and interpret the findings of this report. A single table compares the characteristics of the exchange and trade systems of all IMF member countries: Summary Features of Exchange Arrangements and Regulatory Frameworks for Current and Capital Transactions in IMF Member Countries. The Country Table Matrix lists the categories of data reported for each country, and the Compilation Guide includes definitions and explanations used to report the data.

The AREAER is available in several formats. This Overview is available in print and online, and the detailed information for each of the 191 member countries and territories is included on a CD that accompanies the printed Overview and in the AREAER Online database. In addition, the AREAER Online contains data published in previous issues of the AREAER and is searchable by year, country, and category of measure and allows cross-country comparisons for time series.6

In general, the AREAER includes a description of exchange and trade systems as of December 31, 2014. However, any changes made to member countries’ exchange rate arrangements before April 30, 2015, are reflected in the report as are some other developments through July 31, 2015.7

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