Chapter

Terminology

Author(s):
International Monetary Fund
Published Date:
January 1971
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It will be convenient as the next step in the discussion to explain the use of certain terms in this pamphlet. Under the Articles or under a Membership Resolution of the Board of Governors, each member establishes a par value for its currency directly or indirectly in terms of gold, and a member may change the par value for its currency from time to time in accordance with the provisions of the Articles. “Devaluation” will refer to the adoption by a member of a new par value for its currency which represents a reduction in gold value, compared with the former par value. “Revaluation” will be the reverse, i.e., the adoption of a new par value with a higher gold value than the antecedent par value.

“Depreciation” will refer to a reduction in the gold value of a currency below that of the par value without the adoption of a new par value. “Appreciation” will be the reverse, i.e., an increase in the gold value of a currency above that of the par value without the adoption of a new par value.

The “book rate” for a currency at any particular date will refer to the rate of exchange between that currency and the U.S. dollar (of the weight and fineness in effect on July 1,1944) at which the Fund accounts for the currency at the particular date. The book rate will correspond to the par value for the time being, or if there has been a depreciation or appreciation and an adjustment or adjustments of the Fund’s holdings of the currency under Article IV, Section 8, the last rate at which an adjustment was made.

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