II. Main Developments in Exchange Rates and Exchange Arrangements
- International Monetary Fund. External Relations Dept.
- Published Date:
- September 1983
This section reports on major developments in members’ exchange rates and exchange arrangements as notified to the Fund in accordance with members’ obligations under Article IV, Section 2(a), of the Articles of Agreement. Developments in respect of multiple exchange market arrangements and official measures resulting in different buying or selling rates are summarized in a separate section on multiple currency practices.
Surveillance of exchange arrangements of members by the Fund, as required under Article IV, Section 3, is normally conducted in the context of consultations, but changes introduced during the intervening period are notified to the Executive Board. In February 1982 the Executive Board reviewed exchange arrangements maintained by members in the period since the Second Amendment of the Fund’s Articles in 1978 and the criteria for classifying these arrangements. To facilitate the implementation of the Fund’s surveillance policy in this area, members’ exchange arrangements are classified under three broad headings, as follows: (1) currencies that are pegged to a single currency or to a composite of currencies (including the SDR); (2) currencies whose exchange rates, although not pegged, have displayed limited flexibility compared with either a single currency or a group of currencies; and (3) currencies whose exchange rates are more flexible. The basic distinguishing factor for the classification of members’ exchange arrangements is the extent and form of the flexibility that these arrangements permit, and this criterion is also applied to subcategorize each of the broad headings in Table 1. Under the provisions of the amended Article IV, Fund members acquired the right to maintain exchange arrangements of their choice, as well as certain obligations regarding the communication of these arrangements to the Fund. During the February 1982 review of changes in exchange regimes adopted by members, it was noted that, under the provisions of the Second Amendment, the international exchange rate system had continued to evolve toward greater flexibility of arrangements.3 A major aspect of this evolution has been the substitution of various forms of managed floating for pegged arrangements, in particular, arrangements involving a peg to a single currency. Another feature of the movement away from single currency pegs has been the increased use of currency composites, including the SDR, that have yielded more continuous adjustments of exchange rates in line with variations in competitiveness.
|Flexibility Limited Against||More Flexible|
|a Single Currency or||Adjusted|
|Pegged||Group of Currencies||according||Other|
|Other||Other||Single||Cooperative||to a set of||managed||Independently|
|U.S. dollar||French franc||currency||SDR||composite||currency2||arrangements||indicators||floating||floating|
|Antigua and||Lao People’s Dem.||Benin||Bhutan||Burma||Algeria3||Afghanistan||Belgium3||Brazil||Argentina||Canada|
|Bahamas3||Liberia||Central African||rupee)||Guinea-Bissau||Bangladesh3,5||Ghana||France||Colombia||Costa Rica3||Japan|
|Barbados||Libya||Republic||Equatorial||Iran, Islamic||Botswana||Guyana||Germany, Fed.||Peru3||Ecuador3||Lebanon|
|Belize||Nepal3,6||Chad||Guinea||Rep. of||Cape Verde||Maldives||Rep. of||Portugal||Greece||South Africa|
|Bolivia||Nicaragua3||Comoros||(Sp. Pta) Gambia, The||Jordan||China,||Qatar4||Ireland||Iceland||United Kingdom|
|Burundi||Oman||Congo||(£ stg.)||Kenya||People’s Rep.3||Saudi Arabia4||Italy7||India8||United States|
|Dominica||Paraguay||Ivory Coast||(SAR)||São Tomé and||Fiji||United Arab||Netherlands||Korea|
|St. Lucia||Senegal||Kuwait||New Zealand|
|El Salvador3||St. Vincent and||Togo||Vanuatu||Madagascar||Nigeria|
|Ethiopia||Grenadines||Upper Volta||Viet Nam||Malaysia||Pakistan|
|Haiti||Syrian Arab Rep.3|
|Honduras||Trinidad and Tobago||Norway||Sri Lanka|
|Jamaica3||Yemen Arab Rep.||Guinea||Uganda3|
In view of the more heterogeneous nature of members’ arrangements permitted under the amended Article IV, the new classification on the basis of flexibility provided a more satisfactory description of arrangements of the large number of members’ arrangements in the previously undefined residual category.4 The new classification included a distinction between managed and independently floating arrangements.
The trend toward the adoption of more flexible exchange arrangements continued in 1982. During this time, six countries changed their exchange arrangements to or from pegged arrangements, of which five moved in the direction of greater flexibility. The other member reverted to a single currency peg in conjunction with a sizable devaluation and an effort to unify its multiple exchange markets. Two other countries that had previously limited the flexibility of their exchange rate in terms of a single currency undertook instead to manage their exchange rate on a flexible basis; a third ceased management altogether and now allows its exchange rate to float independently. Five other countries did diminish the flexibility of their exchange arrangement slightly, but two of these did so within the context of a simplification of their multiple exchange markets.
Developments in Major Currencies Subject to Flexible Arrangements5
No major changes occurred in the institutional arrangements of, or participation in, the EMS during the period under review. Pressures did develop, however, within the EMS on several occasions in 1982, and as a consequence two realignments of the parity grid took place. The pressure on the Belgian franc that had begun in December 1981 intensified during the early part of 1982, and despite heavy intervention by the National Bank of Belgium, the franc’s divergence indicator remained close to its lower threshold.6 As the Danish krone also began to come under pressure, the central rates and bilateral intervention limits of the EMS currencies were realigned on February 22. The adjustments resulted in a devaluation of the Belgian franc and the Danish krone by 8.5 percent and 3 percent, respectively, against the other EMS currencies. The exchange rate adjustment for the Belgian franc was the largest for one single currency since the inception of the EMS. In deriving the new ECU central rates, the notional ECU central rate of the pound sterling was revalued by almost 8 percent to allow for the change in its market rate since the realignment of October 1981. When the realignment was announced, the exchange rates of the Belgian franc and the Danish krone showed the most movement against the U.S. dollar, depreciating by 5.4 percent and 1.6 percent, respectively; the exchange rates of the other participants in the EMS appreciated marginally against the U.S. dollar. Immediately subsequent to the realignment, developments within the EMS were characterized by slight pressure on the Belgian franc and the Italian lira but, in particular, by heavy speculative activity against the French franc, emanating both from a widening inflation rate differential between France and its industrial partners and from the political factors associated with regional elections in France. In consequence the Bank of France progressively raised its call money rate in March and, in a synchronized effort, the Federal Republic of Germany lowered its Lombard rate, and the Netherlands and Switzerland both reduced their discount rates. These actions were sufficient to temporarily quell heavy speculative activity but, fueled by rumors of a possible further realignment, pressure against the Belgian and French francs and the Italian lira resurfaced in late May and during the first weeks of June, requiring heavy intervention in defense of the existing parity grid. On the weekend of June 12, 1982 and with effect from June 14, 1982, the central rates and bilateral intervention limits of the EMS currencies were again realigned. The French franc and the Italian lira were devalued by 5.75 percent and 2.75 percent, respectively, while the deutsche mark and the Netherlands guilder were revalued by 4.25 percent against the currencies of Belgium, Luxembourg, Denmark, and Ireland. This EMS realignment was the sixth since the inception of the system in March 1979 and the largest in terms of the magnitude of changes in bilateral rates. The adjustments implied a revaluation of the deutsche mark and Netherlands guilder of 10.6 percent against the French franc and of 7.2 percent against the Italian lira. On the basis of the EMS central rates, the realignment entailed overall effective depreciations of the French franc and the Italian lira of 6.3 percent and 3.3 percent, respectively, while the deutsche mark and the Netherlands guilder each showed an effective appreciation of 3.6 percent; the realignment’s impact was least significant in effective terms for Belgium, Denmark, Ireland, and Luxembourg. On June 14, 1982 all the currencies of the countries participating in the EMS depreciated against the U.S. dollar, ranging from a decline of 6.3 percent by the French franc to a depreciation of 0.7 percent by the Netherlands guilder. Following the realignment, speculative pressures within the EMS disappeared, only to re-emerge in August against the French franc, which moved to the middle of the band after having been at or near its top. Pressure against the French franc continued and, for most of the remainder of the year, led to substantial intervention. The Danish krona also came under pressure in September and October, and toward the end of the year both the Belgian franc and the Italian lira required support, the former being occasionally at or below its threshold of divergence in December.
During 1982 the U.S. dollar appreciated against the EMS currencies, the Japanese yen, and the Swiss franc and somewhat less against the Canadian dollar. The upward trend in the exchange rate of the U.S. dollar observed toward the end of 1981 continued, albeit with a minor downward movement in April and May, through early November, when the U.S. dollar reached its highest level against the SDR since the basket method of valuing the SDR came into effect. During this period the U.S. dollar was buoyed by a reduction in the rate of domestic inflation, relatively high interest rates on dollar-denominated assets, and, to some extent, both international political tensions and fears concerning the international financial system. The combination of these factors was most pronounced in the three-month period prior to early November, during which time the U.S. dollar reached record high levels against some major currencies and only the Canadian dollar recorded modest gains against it—largely on the strength of positive interest rate differentials and a continuing trade surplus with the United States. The continual firming trend of the U.S. dollar was reversed in mid-November following a decline in U.S. interest rates and a sharp deterioration of the U.S. trade deficit. A further modest narrowing of international interest rate differentials, and the expectation of continuing decreases in U.S. interest rates, led in December to an easing of the U.S. dollar against all major currencies except the pound sterling. In 1982, all the major currencies depreciated against the U.S. dollar. The depreciation (from the end of 1981 to the end of 1982) ranged from 3.5 percent for the Canadian dollar to 18 percent for the Belgian franc. The U.S. authorities intervened in the foreign exchange markets on five occasions in June, August, and October in line with the U.S. policy of intervening only to counter disorderly market conditions.
As there were in 1980 and 1981, so were there sizable movements in the effective exchange rates of the currencies of most industrial countries in 1982.7 In effective end-of-year terms, the largest appreciations were recorded by the U.S. dollar and the deutsche mark, which rose by 10.4 percent and 5.3 percent, respectively. The Austrian schilling gained 3.8 percent in effective terms, and the currencies of Canada and the Netherlands rose by 0.8 percent and 3.7 percent, respectively. On the other hand, all EMS currencies, with the above-mentioned exceptions of those of the Federal Republic of Germany and the Netherlands, declined in effective terms, from 3.3 percent for the Irish pound to 10.5 percent for both the Belgian and Luxembourg francs. As a group the EMS currencies shown in the “Cooperative Arrangements” column of Table 1 depreciated in effective (trade-weighted MERM) terms by an average of 0.8 percent during 1982. The effective exchange rates of the currencies of the remaining industrialized nations all depreciated—ranging from 0.5 percent for the Japanese yen to 2 percent and 7.2 percent for the Swiss and Australian currencies, respectively, and 16.2 percent for the Swedish krona.
Developments Affecting the Classification of Exchange Arrangements
During the period under review, 15 members notified the Fund of changes in their exchange arrangements involving reclassification under the Fund’s classification scheme for exchange arrangements (Table 1). These notifications involved 18 reclassifications and 14 reclassifications on a net end-year basis. In addition, initial notifications of exchange arrangements were received from Antigua and Barbuda, Belize, and Hungary.
Two exchange arrangements involving SDR pegs were announced. Sierra Leone, which had previously pegged its currency to the SDR, notified the Fund in December that the exchange market for the leone had been split into two recognized markets: an official market in which the exchange rate would be set daily by the Bank of Sierra Leone and a commercial market in which the exchange rate would be determined by fortnightly tenders. Sierra Leone’s exchange arrangement was consequently reclassified to the “Other Managed Floating” sub-classification of the “More Flexible” category. Somalia announced that with effect from July 1 the exchange rate for the Somali shilling would cease to be pegged to the U.S. dollar and would, instead, maintain a fixed relationship with the SDR within margins of 2.25 percent. Accordingly, the Somali shilling was reclassified from the category “Pegged: U.S. Dollar” to the category “Pegged: SDR.”
During the same period, four members adopted single currency pegs but, of these, one subsequently reverted to its former arrangement. Four other members (including Somalia, above) announced that they had ceased to observe a single currency peg. One member adopted the practice of pegging to a currency composite other than the SDR. On assuming membership with the Fund, Antigua and Barbuda announced in February 1982 that its currency was the East Caribbean dollar, which is pegged to the U.S. dollar. In March 1982 Belize, in its initial exchange arrangement notification to the Fund announced that its currency, the Belize dollar, was pegged to the U.S. dollar. Bolivia twice altered its exchange arrangements during 1982. Effective March 22, Bolivia adopted a dual exchange market system consisting of an official market in which the Central Bank would establish buying and selling rates, and a free market in which most exchange transactions would be effected. Accordingly, the Bolivian peso was reclassified from the “Flexibility Limited” category to the “Other Managed Float” category. On November 8, Bolivia unified its exchange markets and pegged the peso to the U.S. dollar, with the result that the exchange arrangement for the peso was reclassified to the category “Pegged: U.S. Dollar.” Under a generalized system of foreign exchange control, Mexico announced on September 6 two exchange rates for the peso, both pegged to the U.S. dollar. Consequently, the Mexican peso was reclassified from the category “More Flexible: Other Managed Floating” to “Pegged: U.S. Dollar.” On December 10, Mexico established two new foreign exchange markets: (1) a controlled market in which the exchange rate would be established by the authorities and adjusted on a daily basis; and (2) a free market in which the exchange rate would be determined by supply and demand. Accordingly, the Mexican peso was reclassified again under the “Other Managed Floating” category. In mid-June Chile changed the exchange arrangement for its peso from a U.S. dollar peg to an arrangement whereby the exchange rate for the peso would be determined on the basis of a currency basket, against which the peso was to be depreciated on a daily basis at a rate equivalent to 0.8 percent a month. The Chilean peso was therefore reclassified from the category “Pegged: U.S. Dollar” to the “Other Managed Floating” category. After some further changes in the exchange regime, Chile announced on September 29 a reference exchange rate for the peso against the U.S. dollar. This rate, which was applied to all foreign exchange transactions other than the servicing of some foreign debt obligations, was adjusted daily by the difference between the average change in the consumer price index of the previous month and the world inflation rate. As a result of these latter changes the Chilean peso was reclassified to the category of “More Flexible: Adjusted According to a Set of Indicators.” With effect from April 2, Madagascar ceased to peg the Malagasy franc to the French franc and began instead to peg its currency to a composite of currencies that reflected the distribution of Madagascar’s trade during 1973–80. In light of this development, the Malagasy franc was reclassified from the “Pegged: French Franc” category to that of “Pegged: Other Composite.” Pakistan indicated in January that a managed floating exchange rate for the rupee would be maintained. The State Bank of Pakistan would now fix the rupee exchange rate against the U.S. dollar on a daily basis. As a result of this action, the Pakistan rupee was reclassified from the “Pegged: U.S. Dollar” category to the “More Flexible: Other Managed Floating” category. On assuming membership with the Fund, Hungary announced in May 1982 that the management of the exchange rate of the forint with respect to convertible currencies would be guided by a weighted basket of nine currencies, with the weights reflecting the currency composition of Hungary’s export receipts. The external value of the forint would be adjusted at varying intervals, generally within margins of 1 percent around the established basket peg. Accordingly, the Hungarian forint was classified in the category “Pegged: Other Composite.”
The exchange regimes of a further eight countries were reclassified to or from the “More Flexible” groups. Five countries opted to manage the float of their currencies, one allowed its currency to float independently, while the other two limited the flexibility of the exchange rate of their currencies to within narrow margins with respect to the currency of another member. Argentina modified its exchange arrangements on several occasions. The exchange rate of the peso for most transactions floated independently in the first half of the year. With effect from July 6, two exchange markets for the peso were established: (1) a commercial market in which the rate was set daily by the Central Bank; and (2) a financial market in which the exchange rate for the peso floated freely. From the latter part of July until the end of October, however, the exchange rate in the financial market remained stable in terms of the U.S. dollar. On November 1 the exchange markets were unified, with the buying and selling rates for the U.S. dollar being set on a daily basis by the Central Bank. In view of these developments, the Argentine peso was reclassified within the “More Flexible” category from the subclassification of “Independently Floating” to that of “Other Managed Floating.” With effect from August 9, the authorities of Costa Rica closed all authorized exchange houses and transferred all exchange transactions to the banking system. As the rate in the banking market, now the major exchange market for the Costa Rican colón, is adjusted periodically in the light of supply and demand developments, the Costa Rican colón was reclassified within the “More Flexible” category from “Independently Floating” to “Other Managed Floating.” The Greek drachma was similarly reclassified in accordance with the intervention by the Bank of Greece in the determination of the exchange rate of the drachma. On the basis of developments in the flexibility of their exchange rate management, the exchange arrangements of both Morocco and the Philippines were reclassified from the category “Flexibility Limited: Single Currency” to that of “More Flexible: Other Managed Floating.” On November 29 the Central Bank of Uruguay discontinued its policy adopted in December 1978 of announcing exchange rates in advance and now permits the exchange rate of the new peso to be determined by supply and demand without intervention from the Central Bank. The Uruguayan new peso was accordingly reclassified within the “More Flexible” category from “Other Managed Floating” to “Independently Floating.” The exchange arrangements maintained by Afghanistan and Thailand were reclassified from the category “More Flexible: Other Managed Floating” to that of “Flexibility Limited: Single Currency”; both countries have limited the flexibility of their exchange rates in terms of the U.S. dollar.
At the end of December 1982, the currencies of 56 members were pegged to a single currency (38 to the U.S. dollar, 13 to the French franc, 2 to the South African rand, and 1 each to the Indian rupee, the pound sterling, and the Spanish peseta). Fifteen currencies were pegged to the SDR and 23 to other currency composites. In all, 94 members had currencies classified under the “Pegged” category. Eighteen members maintained exchange arrangements classified in the “Flexibility Limited” category. Within this grouping 10 currencies were in the “Single Currency” subclassification (all against the U.S. dollar) as a result of having their exchange rates fluctuate within margins of 2¼ percent or less against an identifiable single currency of another member; the other 8 currencies, as shown in Table 1, were those of the nations maintaining cooperative arrangements within the EMS. Thirty-three members maintained exchange arrangements in the “More Flexible” category; of these 5 adjusted their exchange rates according to a set of indicators, 20 operated a managed float, and 8 floated independently.8
Other Developments in Exchange Arrangements
During 1982 numerous modifications of exchange arrangements that did not entail a change in the Fund’s classification of the arrangements were also notified to the Fund. These modifications involved, in the main, discrete adjustments in the exchange value of pegged currencies, changes in the mode or pace of change of preannounced exchange rates, adjustments of currency baskets determining the exchange value of currencies (without necessarily involving a change in the level of the peg), adjustments of margins about the peg, and discrete adjustments to exchange rates maintained under more flexible arrangements.
As in 1981, many countries devalued their currencies discretely during 1982. Those with currencies linked to the U.S. dollar or to currency composites effected devaluations because of the strength of the U.S. dollar and domestic policy considerations. In other instances, devaluations were undertaken in order to correct for real appreciations that had taken place over a number of years. Other members lowered the international value of their currencies on a regular basis without, however, being guided by an explicit set of indicators; these members included a small number that preannounced their exchange rates with a view to reducing uncertainty and to affecting inflationary expectations. Discrete devaluations of exchange rates undertaken by members in 1982 are summarized in Table 3.
|Exchange Rate (Currency Units per US$) (End of Period)||MERM index (1975 = 100)||Percentage Appreciation (+)/ Depreciation (−)|
|Belgian/Luxembourg||Dec. 31, 1981||38.46||104.32|
|(franc)||Dec. 31, 1982||46.92||93.58||−18.0||−10.3|
|Canada||Dec. 31, 1981||1.1859||88.64|
|(dollar)||Dec. 31, 1982||1.2294||89.36||−3.5||+ 0.8|
|Denmark||Dec. 31, 1981||7.325||87.47|
|(krone)||Dec. 31, 1982||8.384||84.43||−12.6||−3.5|
|France||Dec. 31, 1981||5.748||80.72|
|(franc)||Dec. 31, 1982||6.725||75.06||−14.5||−7.0|
|Germany, Fed. Rep.||Dec. 31, 1981||2.2548||122.13|
|(deutsche mark)||Dec. 31, 1982||2.3765||128.57||−5.1||+ 5.3|
|Ireland||Dec. 31, 1981||0.6329||78.52|
|(pound)||Dec. 31, 1982||0.7161||75.96||−11.6||−3.3|
|Italy||Dec. 31, 1981||1,200.0||55.86|
|(lira)||Dec. 31, 1982||1,370.0||53.41||−12.4||−4.4|
|Japan||Dec. 31, 1981||219.90||144.95|
|(yen)||Dec. 31, 1982||235.00||144.19||−6.4||−0.5|
|Netherlands||Dec. 31, 1981||2.469||114.90|
|(guilder)||Dec. 31, 1982||2.625||119.18||−5.9||+ 3.7|
|United Kingdom||Dec. 31, 1981||0.52411||90.93|
|(pound sterling)||Dec. 31, 1982||0.61939||83.95||−15.4||−7.7|
|United States||Dec. 31, 1981||…||107.22|
|(dollar)||Dec. 31, 1981||…||118.39||…||+ 10.4|
Units per Unit of
or SDR Peg2
|Percentage Appreciation (+)/|
Depreciation (−) (in Terms
of Domestic Currency
per Unit of Foreign Currency
or SDR Peg)
|Peg||Old rate||New rate|
|Bangladesh (taka)3||Jan. 11||Other composite||38.0068||38.4220||−1.1|
|Aug. 24||Other composite||38.4220||39.0000||−1.5|
|Bolivia (peso)||Nov. 8||U.S. dollar||43.57||198.0||−78.0|
|Botswana (pula)||May 7||Other composite||…||…||−10.0|
|Chile (peso)||June 15||U.S. dollar||39.0||46.0||−15.2|
|Ecuador (sucre)||May 13||U.S. dollar||25.0||33.0||−24.2|
|Finland (markka)||Oct. 6||Other composite||…||…||−4.2|
|Oct. 10||Other composite||…||…||−5.7|
|Hungary (forint)||July 13||Other composite||…||…||−7.0|
|Nov. 30||Other composite||…||…||−3.0|
|Dec. 7||Other composite||…||…||−1.0|
|Iraq (dinar)||Oct. 16||U.S. dollar||.2953||.31086||−5.0|
|Kenya (shilling)||Dec. 10||SDR||11.95||13.74||−13.0|
|Lao, People’s Dem. Rep. (kip)||Jan.||U.S. dollar||30.0||35.0||−14.3|
|Madagascar (franc)||May 17||Other composite||…||…||−13.0|
|Malawi (kwacha)||Apr. 24||SDR||1.0541||1.2122||−13.0|
|Mauritania (ouguiya)||Feb.||Other composite||…||…||−2.0|
|Nepal (rupee)||Dec. 17||U.S. dollar||13.2||14.3||−7.7|
|Norway (krone)||Aug. 2||Other composite||…||…||−3.0|
|Sept. 6||Other composite||…||…||−3.0|
|Paraguay (guaraní)||July 16||U.S. dollar||126.0||160.0||−21.3|
|Romania (leu)4||Jan. 1||U.S. dollar||10.0||12.0||−16.7|
|July 1||U.S. dollar||12.0||15.0||−20.0|
|Solomon Islands (dollar)||Aug. 13||Other composite||…||…||−10.0|
|Somalia (shilling)||July 1||U.S. dollar||12.59||15.2072||−17.2|
|Sudan (pound)||Nov. 15||U.S. dollar||0.90||1.30||−30.8|
|Sweden (krona)||Oct. 8||Other composite||…||…||−15.9|
|Tanzania (shilling)5||Mar. 8||Other composite||8.440||9.28435||−9.1|
|Zimbabwe (dollar)5||Dec. 9||Other composite||0.7601||0.9107||−16.5|
Bangladesh altered the middle rate of the taka in terms of the pound sterling, the intervention currency,9 on two occasions during 1982, for a cumulative depreciation against the pound sterling of 2.5 percent and depreciations in terms of the SDR and the U.S. dollar of 13 percent and 17.6 percent, respectively. On February 5, 1982 the Central Bank of Bolivia announced a 44.3 percent devaluation of the peso with respect to the U.S. dollar. In November Bolivia unified its exchange markets at a new mid-rate of $b 198 = US$1 representing a 78 percent devaluation of the peso with respect to the previous official mid-rate for the U.S. dollar. On May 7 the Botswana pula was devalued by 10 percent against the currency composite to which it is pegged. In adopting a managed float the Central Bank of Chile, on June 15, devalued the peso by 15.2 percent in terms of the U.S. dollar, against which the peso had been pegged. In September the Central Bank of Chile set a preferential rate for the servicing of certain foreign debts contracted prior to August 6; this rate, which is adjusted daily on the basis of the rate of change in the consumer price index in the previous month, was initially set, with effect from August 6, at Ch$49.623 = US$1, representing a devaluation of 5.2 percent against the exchange rate of August 5. Ecuador modified on March 3 the operation of its dual exchange market system by announcing that trade transactions other than petroleum exports would take place at rates that represented a depreciation of 13 percent for essential imports and of 21 percent for all other imports and exports. On May 13 the official exchange rate of the sucre was devalued by 24.2 percent against its previous U.S. dollar rate that had been in effect since 1970. Finland devalued the markka twice in October for a cumulative depreciaton of 9.6 percent against the currency basket to which the markka is pegged. Guinea, in the context of an overall adjustment program, formally adopted on December 1 a system whereby official sales of foreign exchange would be limited to official uses only, while leaving all other transactions to be settled through the outside market. This new arrangement is tantamount to a dual exchange rate regime. The Hungarian forint was devalued on July 13 by 7 percent relative to the basket of currencies to which it is pegged; further devaluations of 3 percent and 1 percent were effected on November 30 and December 7, respectively. On October 16, the Central Bank of Iraq devalued the dinar by 5 percent in terms of the U.S. dollar. Kenya, whose currency is pegged to the SDR, devalued the shilling on December 10 and again during the last few days of December for a cumulative depreciation of 15 percent against the SDR. In January the Lao People’s Democratic Republic moved the preferential exchange rate from KN 30 to KN 35 per U.S. dollar, representing a devaluation of 14.3 percent. The Malagasy franc was devalued on May 17 by 13 percent in terms of the currency composite to which it has been pegged since early April. Effective April 24 Malawi devalued its currency, the kwacha, by 13 percent against the SDR. In February the Mauritanian ouguiya was devalued by 2 percent in terms of the currency basket to which it is pegged. Mauritius, on August 31, 1982, eliminated the special rate for the imports of rice and wheat by making them subject, as are all transactions, to the pegged rate of Mau Rs 12 = SDR 1, thereby implementing a 16.7 percent devaluation for the two goods affected. With effect from December 17, the Nepal Rastra Bank devalued the rupee by 7.7 percent with respect to the U.S. dollar. As a result of a revision of the composition and weights of the currency basket to which the krone is pegged, the Norwegian krone depreciated by 3 percent on August 2; on September 6 the krone was devalued by a further 3 percent against its currency composite. On January 8 Pakistan announced that it would maintain a managed floating exchange rate for the rupee. On January 10, the first working day after the arrangement was introduced, the State Bank’s buying rate, from authorized dealers, for the U.S. dollar was PRs 10.10 = US$1, which represented a 2.0 percent depreciation in terms of the previously fixed rate of PRs 9.90 = US$1. Subsequently the rupee-U.S. dollar rate was changed 67 times for a cumulative depreciation of the rupee of 22.9 percent in 1982. Paraguay, with effect from July 16, fixed the previously floating free market exchange rate at a level that represented a 21.3 percent devaluation against the official rate of ₲ 126 = US$1. Effective January 1, Romania depreciated the rate for imports of crude oil by 16.7 percent from lei 10 to lei 12 per US$1, in conjunction with further steps to unify the commercial exchange rate. On July 1, the separate rate for crude oil imports was further devalued by 20 percent, thereby making the commercial exchange rate of lei 15 per US$1 applicable to all imports paid for in convertible currencies. In late December, Romania depreciated its noncommercial exchange rate by 12 percent against the U.S. dollar.10 The Solomon Islands dollar was devalued on August 13 by 10 percent relative to its currency basket; concurrently the Monetary Authority was authorized to make further discretionary adjustments to the external value of the Solomon Islands dollar up to a limit of 2 percent against the basket during any four-week period. On July 1 Somalia, in effectively abolishing its dual market system, pegged the shilling to the SDR, within margins of 2.25 percent, at So. Sh. 16.5 = SDR 1; the July 1 mid-rate for the U.S. dollar was So. Sh. 15.2072 = US$1, representing a devaluation of 17.2 percent from the previous rate of So. Sh. 12.59 per US$1 applicable to most transactions. In mid-November the official exchange rate for the Sudanese pound against the U.S. dollar, the intervention currency, was changed from LSd 0.90 = US$1 to LSd 1.30 = US$1, representing a devaluation of 30.8 percent. On October 8, the authorities of Sweden announced a change in the benchmark of the currency index for the Swedish krona from the previous level of 111 to 132 (August 29, 1977 = 100). The Sveriges Riksbank announced that it would permit only small fluctuations around the new benchmark of 132, which represented a 15.9 percent devaluation of the krona against its basket. The Syrian Arab Republic on May 24 introduced a third foreign exchange market in which transactions relating to private transfers and the tourist trade would be effected; the initial rate in this market of LS 5.75 = US$1 represented depreciations of 31.7 percent and 61.1 percent against the official rate of LS 3.925 = US$1 and the parallel market rate of LS 5.40 = US$1 on May 23, respectively. Effective March 8, the Bank of Tanzania changed the central rate for the shilling against the U.S. dollar from T Sh 8.440 = US$1 to T Sh 9.28435 = US$1, which represented a 9.1 percent depreciation of the shilling against the U.S. dollar. Uganda introduced a dual exchange market system, consisting of a preferential market in which the rate would be managed by the Bank of Uganda and a secondary market in which the rate would be determined at weekly auctions administered by the Bank of Uganda. The managed preferential rate for the U.S. dollar opened at par with the previous official rate. On the basis of the preferential rate, the Uganda shilling depreciated by 18.3 percent against the U.S. dollar during 1982. On December 9 Zimbabwe devalued its dollar by 16.5 percent against the U.S. dollar, the intervention currency.
India, which maintains the value of its currency within 5 percent margins about a weighted basket of its major trading partners, changed the exchange rate of the rupee against its intervention currency, the pound sterling, on numerous occasions during 1982 for a cumulative appreciation of 10.5 percent against the pound sterling and a cumulative depreciation of 5.6 percent against the U.S. dollar.
Countries that, in managing their exchange rates flexibly,11 changed the exchange rate of their currencies without strictly following an explicit set of indicators effected the following cumulative rates of depreciation in 1982 against their intervention currency, the U.S. dollar: Iceland 50.8 percent; Korea 6.5 percent; and Turkey 28.4 percent. The cumulative depreciation of the Icelandic króna was achieved in part by discrete devaluations of 12 percent and 14.3 percent on January 14 and August 23, respectively, in terms of a trade-weighted exchange rate index. The exchange rate of the New Zealand dollar, which since June 1979 had been adjusted against a basket of currencies on the basis of cost and price differentials, was fixed in terms of its index on June 22 as part of an overall one-year freeze on wages and prices. During the course of 1982 the New Zealand dollar depreciated by 11.1 percent against the U.S. dollar, its intervention currency. Throughout 1982 Brazil, Colombia, Peru, and Portugal adjusted the exchange rate of their currencies frequently on the basis of a set of indicators; in addition, following the realignment of the parities of the EMS currencies, Portugal on June 16 devalued the effective exchange rate of the escudo by 9.4 percent. The cumulative rates of devaluation against the U.S. dollar of the currencies of the above countries during 1982 were as follows: Brazilian cruzeiro 49.4 percent; Colombian peso 16.0 percent; Peruvian sol 48.9 percent; and Portuguese escudo 26.7 percent. The external value of the Chilean peso, which since September 29 was maintained by intervention within 2 percent margins of a reference rate and adjusted daily by the Central Bank for an inflation differential, depreciated by 46.1 percent against the U.S. dollar.
|Currency Units per U.S.|
(End of Period)
(+)/Depreciation (−) (in
Terms of U.S. Dollars
per Currency Unit)
|Dec. 31, 1981||Dec. 31, 1982|
|Costa Rica (colón)||36.09||40.25||−10.3|
|New Zealand (dollar)||1.213||1.365||−11.1|
|Sierra Leone (leone)||1.174||1.233||−4.8|
|Sri Lanka (rupee)||20.55||21.32||−3.6|
|South Africa (rand)||.95657||1.074||−10.9|
|Uruguay (new peso)||11.594||33.950||−65.9|
|Western Samoa (tala)||1.099||1.237||−11.2|
Several countries, aside from those noted above, that otherwise manage the float of their currencies, announced discrete changes in the external value of their currencies. In the first of several changes, Argentina, on May 5, changed the peso’s exchange rate from $a 11,950 (buying) and $a 12,000 (selling) to $a 14,000 (buying) and $a 14,050 (selling), respectively, thereby effecting a devaluation of 14.6 percent against the U.S. dollar. Proceeds from unpromoted exports registered with customs prior to May 5 were to be surrendered at the exchange rate prevailing on May 4; however, other exports that had been declared to the National Grain Board prior to May 4 were to be surrendered at a rate communicated daily by the Central Bank. On July 5, the exchange market was split into a commercial and financial market. The commercial rate, which was to be announced daily by the Central Bank and to apply to all exports and imports registered with customs on or after July 6, was initially set at $a 20,000 per US$1, representing a devaluation of 21 percent against the U.S. dollar compared with the official rate of $a 15,750 on July 5. The financial market rate was to be determined freely by supply and demand, and it was to apply to all permitted transactions not otherwise eligible for the commercial rate, with the exception of receipts from exports registered prior to July 6, for which special provisions were established. On September 13 it was established that henceforth 15 percent of both export proceeds and import payments were to be effected at the financial rate, with the balance to be transacted at the commercial rate; the “mixed” rate was changed on October 1 to 80 percent and 20 percent of the commercial and financial rates, respectively. On November 1 the commercial and financial markets were unified into a single official exchange market with an opening rate of $a 38,950 per US$1 (buying) and $a 39,000 per US$1 (selling). These opening rates represented a devaluation of 13.6 percent for trade-related transactions previously effected at the mixed rate established on October 1. The Argentine peso depreciated overall by 85.1 percent against the U.S. dollar. On June 15 Greece adjusted the drachma downward against the U.S. dollar by 3.2 percent, following the realignment within the EMS. During 1982 the Greek drachma depreciated by 13.8 percent and 18.3 percent against the SDR and the U.S. dollar, respectively. Mexico effected several changes in the exchange rate for the Mexican peso during the period under review. The Central Bank of Mexico announced on February 18 that it would withdraw temporarily from the foreign exchange market; on the following day the midpoint exchange rate was Mex$37 = US$1, representing a depreciation of 27.3 percent from the closing midpoint rate for the U.S. dollar on February 17. On June 5 the Bank of Mexico announced that it would intervene again in the foreign exchange market in an effort to depreciate the peso at the rate of Mex$0.04 = US$1 a day. In early August the authorities announced that with effect from August 6 a dual exchange market was to be maintained. A preferential rate, to be supported and announced daily by the Bank of Mexico, was established for the public sector’s foreign borrowing and debt service operations, interest payments on the public sector’s external debt, certain priority import payments, and the proceeds from petroleum exports; a free rate was to be applicable to all other transactions. On the first day of operations, August 8, the peso closed at Mex$48.41 = US$1 in the preferential market and at Mex$75.77 per US$1 in the floating market, representing depreciations of 0.4 percent and 36.3 percent, respectively, against the closing U.S. dollar rate on August 5. On September 1 a generalized foreign exchange control system was announced. Under the system two fixed exchange rates were announced on September 6: (a) a preferential rate of Mex$50 = US$1, applicable principally to the foreign obligations of the public sector and domestic credit institutions, to the interest and principal payments for private sector obligations entered into prior to September, and to a broad spectrum of authorized imports; and (b) an ordinary rate of Mex$70 = US$1, applicable to all transactions not covered by the preferential rate. Relative to the preferential rate prevailing at the end of August, the new fixed preferential rate represented a devaluation of 0.5 percent, whereas the fixed ordinary rate implied an appreciation of 42.9 percent relative to the last closing U.S. dollar rate in the free market. The fixed rate system was replaced, on December 10, by a dual market system consisting of (a) a controlled market through which would pass mainly transactions relating to the external debt, specified imports and nonexempt exports and in which the authorities would set and adjust the rate on a daily basis, and (b) a free market in which the rate would be determined by supply and demand, for all transactions not specific to the controlled market. The new system became operative on December 20, on which day the controlled market rate was initially set at Mex$95 = US$1 (buying) and Mex$95.10 (selling), involving a depreciation of 26.4 percent in relation to the previous prevailing ordinary rate of Mex$70 = US$1. The free market rate on December 20 was approximately Mex$150 = US$1, representing a 53.3 percent depreciation against the ordinary U.S. dollar rate on the previous working day. On the basis of the controlled market rate, the Mexican peso depreciated by 72.8 percent against the U.S. dollar in 1982. On December 4 the authorities of Spain, in response to intense speculative pressure during the previous two months, devalued the peseta by 8 percent in terms of the U.S. dollar. During the year the peseta depreciated by 22.4 percent against the U.S. dollar and by 18.1 percent in terms of the SDR. Effective October 22, Yugoslavia devalued the dinar by 16.7 percent against the U.S. dollar. During the year under review the dinar depreciated by 29.4 percent and 33.1 percent with respect to the SDR and U.S. dollar, respectively.
A number of modifications were made by the countries that issue advance announcements of the rates of change of the exchange rates of their currencies. The Central Bank of Chile announced that with effect from June 16 the exchange rate for the peso against a basket of currencies would be depreciated on a daily basis at a rate of 0.8 percent a month. This practice prevailed until August 5, when for a brief period until September 29, the exchange rate for the peso for most transactions was determined freely by market forces. On June 5 the Bank of Mexico expressed its intention of depreciating the peso at Mex$0.04 per US$1 a day. This policy, which stayed in place with respect to the managed preferential rate introduced on August 6, was discontinued with the announcement on September 1 of the generalized foreign exchange control system. With effect from December 20, when the new dual exchange market system went into operation, the Central Bank of Mexico preannounced for periods of two weeks in advance the daily peso-U.S. dollar exchange rate in the controlled market; initially the exchange rate was adjusted at an annual rate of 50 percent, but the adjustment rate remained subject to modification depending on, among other factors, the expected inflation differential between Mexico and its main trading partners. Portugal, on June 16, reaffirmed its policy, announced in December 1981, of depreciating the escudo by 0.75 percent a month against its effective exchange rate. Uruguay, with effect from November 29, discontinued the system, first adopted in December 1978, of announcing exchange rates in advance and replaced it with a floating exchange rate regime. During the year under review the new peso depreciated by 65.6 percent against the U.S. dollar.
Appreciations of the external value of currencies occurred relatively infrequently in 1982. In setting an initial reference exchange rate of Ch$66 per US$1, Chile on September 29 marginally appreciated the peso by 1.3 percent against the average market rate for the U.S. dollar on the previous day. Maldives, which maintains the exchange rate of its currency within narrow margins about the U.S. dollar, revalued the market rate of the rufiyaa on March 31 by 6.4 percent against the U.S. dollar. On July 16, Paraguay set the free market exchange rate at ₲ 160 = US$1; this new rate represented an appreciation of 21.9 percent in relation to the previous free exchange market rate of ₲ 195 = US$1. On June 27, Sudan fixed the maximum buying and selling rates in the legalized free market at LSd 1.11 and 1.15 per US$1, respectively, thus appreciating the pound by 23.7 percent against the U.S. dollar in that market. Because virtually no transactions were effected at these rates, they were eliminated in August.
Four members adjusted the currency baskets on which their exchange rates are based. In February Fiji adjusted the weights in its currency basket to reflect trade in services as well as in goods. On August 2, Norway, in making the first change since the currency basket for the determination of the exchange rate of the krone was introduced in 1978, added the Austrian schilling and the Canadian dollar to the basket and further revised the weights of the other component currencies to reflect both Norway’s exports of manufactured goods to the countries involved and its competitive relationship with “third” countries. When Tanzania devalued in March, it also announced that henceforth the exchange rate of the shilling would be determined by a basket consisting of the currencies of Tanzania’s main trading partners; previously the exchange rate had been based on daily SDR rate quotations. On December 9, Zimbabwe altered its currency basket to reflect trade rather than settlement patterns.
Of the countries whose currencies are pegged to baskets, only one adjusted the margins around the peg. On October 10, Finland changed the fluctuation limits of its currency index; the upper and lower limits were revised from 119.0 to 127.5 and from 112.0 to 121.9 (1974 = 100), respectively, thereby reducing the permitted range of fluctuations of the Finnish markka against its basket from 6.0 percent to 4.5 percent.
One member introduced a new currency. The Central Bank of Vanuatu on March 22 started to issue vatu notes to replace the existing currencies in circulation in Vanuatu, including the New Hebrides franc and the Australian dollar.
During the period under review, several exchange arrangement changes other than those already noted were introduced. Argentina on April 5 temporarily suspended the sale of foreign exchange except to effect payments for imports and the servicing of the external debt. With effect from April 30 all external payments were made subject to the prior approval of the Central Bank, but this requirement was liberalized somewhat during subsequent months. On November 11, and retroactive to January 1, the Monetary Authority of Belize was converted to a Central Bank. Bolivia on February 5 declared all transactions in the parallel exchange market to be illegal. The Central Bank of Kenya announced the suspension of all foreign exchange dealings on August 2, following developments a day earlier that had affected internal security. On August 10 the Central Bank of Kenya resumed its normal foreign exchange operations and no change was made in the exchange rate at that time. In late January the rufiyaa was made the sole medium of exchange in Maldives, and local transactions in U.S. dollars, which had been prevalent, were banned. In the context of the generalized foreign exchange control system introduced on September 1, foreign currency was declared illegal tender in Mexico, and henceforth all contracts were to be settled in Mexican pesos. On November 10 the Central Bank in Sri Lanka discontinued the quotation of buying and selling rates for the deutsche mark, French franc, Indian rupee, Japanese yen, and the pound sterling; the buying and selling rates for the U.S. dollar continued to be determined by the Central Bank on a daily basis.
There were several major developments in the exchange arrangements of member countries during the first quarter of 1983. On March 21, 1983 the bilateral central rates, intervention limits, and central rates in terms of the ECU of the countries participating in the EMS were adjusted. It was the seventh realignment since the EMS was established in March 1979, and the first to have resulted in changes in the central rates for all of the EMS currencies. In terms of the ECU, the Irish pound (3.6 percent), French franc (2.6 percent), and the Italian lira (2.6 percent) showed the greatest depreciation; the deutsche mark (5.4 percent), the Netherlands guilder (3.4 percent), and the Danish krone (2.4 percent) experienced the largest appreciations. With the exception of the Danish krone, which appreciated by 0.5 percent, all the EMS currencies depreciated against the U.S. dollar, with the Irish pound (5.2 percent) and the French franc (4.6 percent) depreciating the most. During the quarter, three members notified the Fund of changes in their exchange arrangements involving reclassification under the Fund’s classification scheme for exchange arrangements (Table 1). Ecuador, in conjunction with a 21.4 percent devaluation of the sucre against the U.S. dollar, announced that with effect from March 23, 1983, the sucre would be depreciated by S/. 0.04 per US$1 each business day and that the scope of the official exchange market would be considerably enlarged; consequently, Ecuador’s exchange arrangements were reclassified from the category “Pegged: U.S. Dollar” to the category “More Flexible: Other Managed Floating.” The authorities of Indonesia notified the Fund that on March 30, 1983 the rupiah had been devalued by 27.6 percent against the U.S. dollar and that, in addition, the exchange rate would be flexibly managed in order to meet unexpected external developments. To reflect this latter policy, the Indonesian rupiah has been reclassified within the “More Flexible” category from the subclassification “Flexibility Limited Against a Single Currency” to that of “Other Managed Floating.” Mauritius announced that with effect from February 28, 1983 the Mauritian rupee was no longer pegged to the SDR but pegged instead to a composite of several currencies, reflecting mainly Mauritius’ pattern of trade. On the basis of that notification, the Mauritian rupee has been reclassified from the category “Pegged: SDR” to the category “Pegged: Other Composite.” In addition to the above changes, there were several major devaluations during the quarter ended March 31, 1983. Australia devalued its dollar by 10 percent against a trade-weighted basket of currencies on March 7, 1983. Following the devaluation of the Australian dollar, both the New Zealand dollar and the Papua New Guinea kina were devalued, by 8.3 percent and 10 percent, respectively, against the U.S. dollar on March 8, 1983. Brazil, in the context of a comprehensive economic adjustment program, devalued the cruzeiro by 23.1 percent in terms of the U.S. dollar on February 21, 1983. Effective January 5, 1983 the Central Bank of Iceland announced a 9 percent devaluation of the króna against the trade-weighted exchange rate index to which it is pegged. Greece devalued the drachma by 15.5 percent against the U.S. dollar with effect on January 9, 1983. The middle rate of the Malagasy franc was changed from MFG 375.27 = US$1 on January 28, 1983 to MFG 397.42 = US$1 on January 31, 1983, representing a 5.6 percent depreciation against the U.S. dollar. On February 28, 1983 Venezuela adopted a multiple exchange rate system following the closure of the official market from February 21 through March 4, 1983. The new system introduced the following three markets: (1) a market in which the previous exchange rate of Bs 4.30 = US$1 would be used for receipts from oil exports and payments for essential imports and for external public debt; (2) a market in which an exchange rate of Bs 6.0 = US$1 would be used for some revenues from state enterprises, imports of raw materials, and intermediate goods; this represented a depreciation of 28.3 percent in terms of the U.S. dollar; and (3) a market in which a managed floating exchange rate is used for tourism, private transfers, and capital flows. Western Samoa devalued the tala by 10 percent in terms of the New Zealand dollar, with effect from February 7, 1983. Following the exchange rate adjustments in the South Pacific region on March 8, 1983, the mid-rate for the Western Samoan tala against the New Zealand dollar was left unchanged, with the result being that the tala depreciated by a further 8.3 percent in terms of the U.S. dollar. Subsequent to the closure of foreign exchange operations between January 7–9, 1983, the Bank of Zambia devalued the kwacha by 20 percent in terms of the SDR to which the kwacha is pegged.
In other developments, Chile announced that, with effect from March 23, 1983, the reference rate of the Chilean peso would be adjusted on the basis of the domestic inflation rate only and not, as was previously the case, on the basis of the difference between the average rate of change of the domestic consumer price index and an estimate of the world inflation rate. Fiji, subsequent to the devaluations of both the Australian and New Zealand dollars, did not adjust the exchange rate of its dollar against the weighted basket of currencies to which it is pegged; as a result, on March 8, 1983, the Fiji dollar appreciated by 2.7 percent in terms of the U.S. dollar. Following the realignment of the EMS currencies, Portugal announced, on March 28, 1983, a 2 percent downward adjustment in the effective exchange rate of the escudo and an increase in its crawling peg depreciation from 0.75 percent to 1 percent a month.
The increased flexibility of members’ exchange arrangements in the 1970s as compared with the Bretton Woods system is evident from a comparison of the average magnitudes of exchange rate changes in the period January 1948-August 1971, and in the subsequent period through the end of 1981. For the Fund membership as a whole, the average monthly change (without regard to sign) rose fourfold, from 0.3 percent in the former period to 1.4 percent in the latter. The increase in flexibility in terms of annual changes was less than a doubling—from an average change of 4.3 percent a year to 7.2 percent a year—reflecting in part the greater frequency of par value adjustments in the second half of the 1960s, which served as a prelude to the floating of the 1970s. The increase in flexibility was more marked for the group of industrial countries, for which average monthly changes increased almost tenfold, from 0.2 percent to 1.9 percent, and annual changes almost quadrupled, from 2.5 percent to 9.2 percent.
Prior to the adoption of the new classification in the 1982 review, members’ arrangements under the “Flexibility Limited: Single Currency,” “More Flexible: Other Managed Floating,” and “Independently Floating” headings were grouped together in the residual category “Other.”
For changes in 1982 of the exchange rates of this group of members, see Table 2.
Intervention in EMS currencies, which is required in unlimited amounts when bilateral limits are reached, may create claims on or liabilities to the very short-term facility of the European Monetary Cooperation Fund (EMCF). These claims must then be settled normally by the transfer of ECUs or other reserve assets within a specified period not exceeding 45 days of the end of the month in which intervention takes place. Settlements may be deferred automatically for three months, and for a further three months by mutual agreement. The divergence indicator is a measure of the divergence of the market rate expressed in ECUs for each EMS currency from its ECU central rate. Divergence thresholds are established for each currency, taking into account its weight in the ECU basket in such a manner that there is broadly the same degree of probability of each EMS currency reaching its threshold. If a threshold is reached or exceeded, there is a presumption that the authorities concerned will correct the situation by diversified intervention, measures of domestic monetary policy, changes in central rates, or other economic policy measures.
Based on the Fund’s multilateral exchange rate model (MERM), in which the implicit weighting structure takes account of the relative importance of a country’s trading partners in its direct bilateral relationships with them, of competitive relationships with “third countries” in particular markets, and of estimated elasticities affecting trade flows.
No current information is available on Democratic Kampuchea.
Effective January 11, 1983 the intervention currency was Changed to the U.S. dollar at a mid-rate of Tk 24.50 = US$1, representing a devaluation of 0.6 percent against the U.S. dollar.
On December 29 it was announced that with effect from January 1, 1983, the commercial rate would be depreciated from lei 15 to lei 16.5 per US$1 representing a devaluation of 9.1 percent.
Changes in exchange rates in 1982 of currencies subject to “More Flexible” arrangements are shown in Table 4.