- International Monetary Fund. External Relations Dept.
- Published Date:
- September 1955
At present 45 members of the Fund have the obligation to consult annually with the Fund on the retention of the exchange restrictions which they maintain under Article XIV, Section 2, of the Fund’s Articles of Agreement. The Fund had completed its third series of annual consultations at the time this Report was written. Through these consultations, which took place either in the member country or in Washington, the Fund has established direct and close contacts with its members and has strengthened the basis for effective international collaboration on exchange matters through which members may attain the objectives set forth in the Fund Agreement.
A number of members of the Fund do not avail themselves of the postwar transitional period arrangements of Article XIV. These countries are fully subject to the obligations of Article VIII of the Fund Agreement, which, among other things, requires them not to impose restrictions on the making of payments and transfers for current international transactions or to engage in discriminatory currency arrangements or multiple currency practices without Fund approval. These countries are referred to in Part II of this Report as “Article VIII countries.” They do not use exchange restrictions for balance of payments purposes, but at times a few of them have obtained Fund approval for exchange restrictions for other purposes. As the effects of the destruction and disruption caused by the war increasingly disappear, the time is coming much closer when the postwar transitional period may end for all other members. The Fund is considering this question in connection with various aspects of possible further moves to convertibility.
As was anticipated,1 there has been further progress toward convertibility during the past year, and it is anticipated that this progress will continue during the next twelve months, in which the Fund will carry out the fourth series of consultations. In these consultations emphasis will be placed on assisting countries which still have balance of payments difficulties to establish a basis for the further relaxation of restrictions and the reduction of discrimination and on trying to ensure that restrictions no longer necessary for balance of payments reasons are removed or that the steps necessary to achieve their removal are undertaken.
See Fifth Annual Report on Exchange Restrictions, p. 22.