Explanatory Note to Country Surveys
- International Monetary Fund. External Relations Dept.
- Published Date:
- September 1959
The following surveys of individual exchange systems of various countries are presented in three groups. The first comprises member countries which, for the most part, maintain restrictions under the postwar transitional period arrangements of Article XIV of the Fund Agreement. In some of these countries, however, restrictions to which the Fund has given approval under Article VIII of the Agreement may also be in operation. The second group comprises member countries which do not apply any restrictions under Article XIV; they are referred to as “Article VIII countries.” The third group comprises certain countries which, at the time this Report was written, were not members of the Fund.
As in previous Reports, the surveys relate generally to the exchange systems as at the end of the last calendar year. However, in view of the numerous changes in exchange systems following the introduction of external convertibility for the leading Western European currencies, a number of the surveys in this Report relate to the exchange systems at a later date.
A standardized framework has been employed in drafting the surveys: each system is described under similar headings, and each country survey contains a final section that lists chronologically the more significant changes which took place in the restrictive system during 1958 and, for some countries, the early months of 1959. An indication of the subject matter to be found under these headings is given in the following paragraphs.
Under Exchange Rate System, the par value, where one has been agreed with the Fund, and/or the official exchange rates are given, usually in terms of the U.S. dollar, together with a reference to other rates which may be essential to the country’s exchange rate system. In the surveys of most countries with multiple exchange rate systems, further details are given in the Table of Exchange Rates (see below). The rates quoted are those effective as at December 31, 1958, unless stated otherwise.
Under Exchange Control Territory, the extent of applicability of the exchange control is explained when it covers two or more sovereign or autonomous territories whose residents have common rights and obligations under the exchange control regulations.
Under Administration of Control, some indication is given of the authorities responsible for policy and administration of the controls and of the extent to which their powers are delegated for practical working purposes.
Under Prescription of Currency, the requirements affecting the selection of the currency and method of settlement for transactions with other countries are described. Where a country has concluded payments agreements with other countries or monetary areas, the terms of these agreements often lead to prescription of the currency for specified categories of payments to and from the countries concerned. The countries and monetary areas with which bilateral agreements are in force are listed either in the text or in a footnote. For a country whose currency has international importance, the prescription of currency arrangements involve the use of its own currency held by nonresidents in accounts which are designated geographically, according to the residence of the account holder, on either a country or a regional basis. Payments to and from such nonresident accounts are then regarded as equivalent to settlements in the currency of the country or monetary area of the nonresident account holder.
Under Nonresident Accounts, an indication is given of the manner in which the country regards the accounts in its currency of account holders not regarded as resident in that country, and the facilities and limitations attached to such accounts. Where there is more than one type of nonresident account, the nature and operation of the various types are described.
Under Imports and Import Payments, import licensing requirements are described briefly, and details are given of the additional requirements imposed on payments for imports and of any advance deposit requirements. The term “open general license,” which is used in some countries, indicates arrangements whereby certain imports or other international transactions are exempt from the restrictive application of licensing requirements, in contrast to an “individual license,” which may be either given freely or restricted in its issue, according to administrative decisions.
Under Payments for Invisibles, action in the matter of permitting payments abroad for current transactions in invisibles is described briefly, together with any limitations on the export of foreign and domestic banknotes. For most countries that do not impose limitations on payments for invisibles, this section is combined with the section on Proceeds from Invisibles (see below).
Under Exports and Export Proceeds, the application of export licensing, where this is operative, is indicated, together with a brief outline of the requirements imposed on the proceeds derived from exports. The expression “exchange receipts must be surrendered” is used to indicate that the recipient is required by the regulations to sell his foreign exchange against local currency, usually at the official rate, to the central bank or to a commercial bank or exchange dealer authorized for this purpose. In some countries there is a requirement that the proceeds be sold in a free market.
Under Proceeds from Invisibles, any conditions governing exchange derived from transactions in invisibles are given and any limitations on the import of foreign and domestic banknotes are described.
Under Capital, a general indication of the special arrangements or limitations attached to international receipts and payments in respect of capital items is given. Where special arrangements for foreign capital also cover the income thereon, they are dealt with in this section rather than in the sections on Payments for Invisibles and Proceeds from Invisibles.
Under Banknotes, a heading included in only a few of the country surveys, special arrangements concerning the negotiation of foreign banknotes within the country are described briefly.
Under Table of Exchange Rates, which is provided for most countries having a multiple exchange rate structure, the exchange rates effective as at December 31, 1958 or, in a few surveys, at a later date are given. For convenience, the data in these tables are in terms of local currency units per U.S. dollar. The tables include effective rates arising from the negotiation of percentages of the total exchange at different rates, the imposition of exchange taxes, the negotiation of exchange certificates, etc.
Under Changes during 1958, the more significant changes in the country’s restrictive system during 1958 are presented in chronological order. Important measures made effective in the early months of 1959 are indicated at the end of the survey.