I. Introductory Note
- International Monetary Fund. External Relations Dept.
- Published Date:
- September 1965
The application of restrictions on trade and payments by member countries of the Fund during the period under review showed, as in previous periods, wide variations in intensity and method. The changes that took place in restrictive systems were largely a reflection of shifts in the balance of payments positions and outlook of member countries. The country surveys in Part II show that these changes were numerous. Several countries, including the United Kingdom and the United States, took steps to moderate capital outflows. Countries experiencing chronic inflation and hence pressure on their, payments positions made further adjustments in their exchange rate structures, intensified restrictions, or introduced new restrictive devices. These measures, unless accompanied by internal steps to stem inflation, could not be expected to correct the imbalance, and in some countries they complicated the task of restoring stability. Where stabilization programs were introduced along with more realistic exchange rates, some simplification and liberalization of restrictions were found possible. In countries where time was needed to reduce inflationary pressures, a policy of allowing exchange rates to fluctuate for the time being tended to minimize the decline in exchange reserves.
The range of restrictive devices applied by some countries appears to have widened in recent years. The use of advance import deposit requirements has spread, and more countries are applying surcharges to imports when in balance of payments difficulties. In some countries these techniques have been introduced as an alternative to other devices but in many others they have supplemented restrictions already in force. In most instances they have been designed to serve as temporary measures and have been reduced or eliminated as the balance of payments has improved. But in many countries restrictive measures have lost their temporary character and the task of correcting the payments position has thereby been made much more difficult.
In contrast, a number of member countries whose restrictive systems have been progressively liberalized in recent years have relied on internal measures to meet temporary balance of payments difficulties rather than resort to restrictions. By making use of the Fund’s resources several member countries have been able to maintain or extend their liberalization policies. In the period under review, 2 members, Nicaragua and Costa Rica, both of which had eliminated restrictions on the making of payments and transfers for current international transactions (and on capital movements as well), accepted the obligations of Article VIII, Sections 2, 3, and 4, of the Fund Agreement. This brings to 26 the number of Fund members that have accepted the obligations of Article VIII.1 These countries accounted for about 70 per cent of total world exports in 1964.
These countries are Austria, Belgium, Canada, Costa Rica, Dominican Republic, El Salvador, France, Federal Republic of Germany, Guatemala, Haiti, Honduras, Ireland, Italy, Jamaica, Japan, Kuwait, Luxembourg, Mexico, Netherlands, Nicaragua, Panama, Peru, Saudi Arabia, Sweden, United Kingdom, and United States.