Chapter

Appendix I Multiple Exchange Rates Maintained by Members as of December 31, 1990

Author(s):
International Monetary Fund
Published Date:
January 1992
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(Unless Otherwise Noted)

Afghanistan

The official exchange rate is defined in terms of the U.S. dollar, but it applies to no more than 10 percent of convertible currency transactions. The official rate applies to (1) a few transactions of the Central Government; (2) certain foreign currency income earned in Afghanistan; and (3) some transactions in accounting units specified under bilateral payments agreements.

Aside from the official rate, there is a market-determined rate that prevails in the money bazaar, which operates legally, and a commercial rate set by the Government and linked to the bazaar rate. Most convertible currency transactions are effected at the commercial or free market rates.

The Bahamas

The official rate is fixed in terms of the U.S. dollar.

A freely determined exchange rate involves only capital transactions in which “investment currency” is negotiated between residents in respect of purchases from nonresidents of foreign currency securities or in the making of direct investments outside The Bahamas.

Bangladesh

The official rate vis-à-vis the U.S. dollar is determined with reference to a weighted basket.

Different effective exchange rates arise from the operation of the Secondary Exchange Market, which comprises the Wage Earners’ Scheme (WES) and the Export Performance Benefit (XPB) Scheme. Under the WES, foreign exchange earnings remitted by workers abroad, tourist receipts, and most service receipts are sold at a rate determined by a committee of authorized foreign exchange dealers (mainly banks). Under the XPB scheme, exporters and certain indirect exporters of nontraditional items are eligible to receive an exchange rate premium.

Bolivia

The official exchange rate applies to all foreign exchange operations in Bolivia. The official selling rate is determined by an auction held daily by the Central Bank, which sets a floor price below which no bids will be accepted. This floor price is the official exchange rate. There is a parallel but tolerated exchange market.

Brazil

Since March 1990, Brazil has followed a flexible exchange rate policy under which the cruzeiro floats independently with respect to the U.S. dollar.

Exchange transactions in the exchange markets are carried out by the Central Bank and by banks and tourist agencies authorized to deal in foreign exchange; the tourist agencies deal only in bank notes and traveler’s checks in a “manual market.” The commercial interbank market rate is the same rate that applies to “agreement dollars” used for settlements with bilateral agreement countries.

Different effective rates arise on the selling side from the application of a financial transactions tax (IOF) of 25 percent to purchases of foreign exchange for imports of selected services. On the buying side, different effective rates arise from the operation of an exchange market since January 1989 in which the exchange rate is freely determined by participants in the market. In this market, the transactions include receipts from tourism, payments to exporters of gems and/or to Brazilian investors abroad for foreign exchange receipts corresponding to profits and dividends. The IOF tax of 25 percent was eliminated in March 1990.

Bulgaria

The exchange rate system consisted of three rates: (1) a basic rate pegged to a basket of currencies and to be applied to official transfers and imports of essential products; (2) a market rate to be determined at periodic foreign exchange auctions and to be used for most commercial transactions; and (3) a cash rate applied to transactions in bank notes and traveler’s checks by individuals and to be set on the basis of prevailing conditions in the market. (A unified, floating exchange rate system was introduced on February 19, 1991.)

Chile

The official exchange rate of the Chilean peso (maintained within a band of ±5 percent around the midpoint) is pegged to the U.S. dollar at a rate adjusted at daily intervals according to a schedule established on the basis of the domestic rate of inflation during the previous month, less the estimated world rate of inflation. The official foreign exchange market (formal exchange market) consists of commercial banks, exchange houses, and other entities that are authorized by the Central Bank. Transactions of merchandise trade, remittances of dividends and profits, and authorized capital transactions are effected in this market.

In addition, there is an informal exchange market through which all transactions not required to be channeled through the official foreign exchange market take place. In both markets, private parties are free to negotiate exchange rates.

The Central Bank has provided an exchange subsidy on the service payments on some debts contracted before August 6,1982. The subsidy is paid by means of notes indexed to inflation with a minimum maturity of six years, and carrying a 3 percent rate of interest. On December 31, 1990, the difference between the official rate and the subsidized rate was Ch$72.8 per US$1. Although the stock of debt eligible for the preferential rate is estimated at less than US$70 million, the actual amount is expected to be negligible owing, in part, to the bankruptcy of many of the affected debtors, and the subsidy operations are expected to stop soon.

China

Since January 1, 1986, China has followed an exchange arrangement whereby the exchange rate for the renminbi is based on developments in the balance of payments and in the costs and exchange rates of China’s major competitors.

Since early 1988, all domestic entities that are allowed to retain foreign exchange earnings have been permitted to trade in foreign exchange swap centers at rates mutually agreed upon between buyers and sellers under the supervision of the State Administration of Exchange Control, which must approve the use of foreign exchange purchased in the swap centers.

Colombia

The Colombian authorities follow a policy of adjusting the peso in small amounts at short intervals, taking into account (1) price movements in Colombia relative to those in its major trading partners; (2) the level of Colombia’s foreign exchange reserves; and (3) Colombia’s overall balance of payments performance.

There are other effective exchange rates, which result from (1) a 6.5 percent tax on coffee export proceeds; (2) tax credit certificates granted at three different percentage rates for most export proceeds; (3) the imposition of a remittance tax at two different rates on certain service payments; and (4) an 85 percent advance exchange license deposit for import payments (abolished in January 1991).

Costa Rica

Costa Rica follows a flexible exchange rate system. All transactions, except allowances for studies abroad to students who registered with the Central Bank before 1981, take place at the unified exchange rate.

The official exchange rate of C 20.00 = US$1 is used exclusively for granting foreign exchange to students.

Dominican Republic

The official exchange rate is pegged to the U.S. dollar. The Central Bank administers all foreign exchange transactions.

An illegal parallel foreign exchange market exists. On December 31, 1990, the difference between the official exchange rate and the parallel exchange rate was about 15 percent.

In January 1991, the authorities introduced a dual exchange rate system by introducing a freely floating rate determined by an interbank market. Except for specified transactions—including exports and key imports—which are still under the pegged official exchange rate, all other transactions are subjected to the rate determined by the interbank market. With the devaluations of the official exchange rate during the first quarter of 1991, the differences between the official rate, the interbank rate, and the parallel market rate have been reduced to the range of 1–2 percent.

Ecuador

There are three exchange rates: the official rate, which is used by the Central Bank for accounting purposes only; the intervention market rate of the Central Bank; and the free market rate. All foreign trade transactions of the private sector take place in the intervention market of the Central Bank. Those private sector transactions that do not take place in the intervention market take place in the free market.

Egypt

The exchange rate system consists of the central bank pool rate, the commercial bank rate, and the rate outside banks, which is used for customs valuation purposes.

The rate in the commercial bank market (introduced in May 1987) is set by a committee of eight members (four from public sector banks, two from joint-venture banks, and two from private sector banks), with one observer from the Central Bank and one from the Ministry of Economy and Foreign Trade. The committee fixes the commercial bank rate at the end of each business day; it is binding for all transactions effected in the market the following business day. Four indicators (supply, demand, working balances of the banks, and assessment of general market trends) are used in setting the rates.

The following transactions take place in the commercial bank market: (1) workers’ remittances; (2) tourism receipts; (3) bank purchases from all types of foreign exchange accounts and of foreign bank notes or other means of payment; (4) commissions and bank interest receipts; (5) retained private sector export receipts; (6) surrendered private sector receipts from exports; (7) except for cotton, petroleum, rice, Suez Canal and Sumed Pipeline receipts, all public sector visible and invisible receipts; (8) profits of Egyptian companies and banks; (9) public sector visible and invisible payments within the limits established by the foreign exchange budget; (10) some private sector invisible payments; (11) private sector imports; and (12) settlements of letters of credit opened by the private sector before May 11, 1987.

Private sector payments not authorized through the commercial bank market may be effected through free accounts held with domestic banks (“own exchange”) at a rate agreed upon by the parties.

On August 15, 1989, the Government began unifying the central bank pool rate with the commercial bank rate; a number of adjustments on the pool rate have thus been made since then.

Related to bilateral payments agreements, a number of special exchange rates also exist.

El Salvador

El Salvador maintains a unified floating exchange rate system under which authorized foreign exchange transactions freely take place at rates determined by supply and demand.

The Central Reserve Bank establishes weekly the exchange rate applicable to transactions between the Central Reserve Bank and the public sector, to foreign exchange surrendered by coffee exporters to the Central Reserve Bank, and to the calculation of tax obligations. This rate is the simple average of the exchange rates set by commercial banks and exchange houses during the previous week.

Ghana

The exchange rate of the Ghanaian cedi is determined in an interbank market supported by weekly wholesale auctions conducted by the Bank of Ghana. This rate is used for official valuation purposes but does not necessarily apply to transactions among authorized dealers or between authorized dealers and their customers.

With effect from February 1, 1988, foreign exchange bureaus could be opened by any person, bank, or institution licensed by the Bank of Ghana. Each foreign exchange bureau is free to quote buying and selling rates. All bona fide imports and approved services may be funded through the bureaus.

International organizations, embassies, and similar institutions are not permitted to transfer funds into Ghana through any foreign exchange bureau or to carry out foreign exchange transactions under the foreign exchange bureau scheme.

Guyana

Three exchange rates exist for the Guyana dollar: an official rate fixed by the Bank of Guyana, a free (cambio) rate determined by market forces, and a special rate fixed by the Bank of Guyana for transactions with member countries of the Caribbean Common Market (CARICOM). This CARICOM rate is adjusted weekly on the basis of movements in the cambio exchange rate.

The transactions effected at the official exchange rate are, on the receipts side, sugar, bauxite, rice, and telecommunications; and, on the payments side, fuel, sugar, rice inputs, foodstuffs under commodity assistance, and official debt-service payments. All other transactions, except CARICOM transactions, are effected at the cambio rate.

On February 21, 1991, the official and cambio rates were unified, and the CARICOM rate was abolished. As an interim arrangement, the official rate was set every Friday at the weighted (by volume transactions) average of the exchange rates prevailing in the cambio market in the week ending Wednesday. Also, rice and telecommunications transactions were transferred to the cambio market.

Haiti

The official value of the Haitian gourde is defined in terms of the SDR but in such a way as to preserve the relationship of G 5 = US$1, which is both the official buying and official selling rate for the U.S. dollar.

This official rate applies to the proceeds from sugar exports, as well as 40 percent of all other export proceeds and foreign exchange received by maritime agencies and nongovernmental organizations; 20 percent of private transfers; foreign exchange receipts of public enterprises; certain public sector payments; public debt-service payments; payments for imports of petroleum products; and official external loans and grants and transfers received by exchange houses.

A different rate established freely in a parallel market, consisting of the commercial banks and a limited number of authorized exchange houses, is used for all other transactions.

Honduras

With the exception of debt-service payments of the Central Government and trade with other Central American countries, all foreign exchange transactions are conducted in an interbank market. The exchange rate in the interbank market is determined by the Central Bank and is adjusted periodically. The selling rate applicable to purchases by the private sector through authorized banks and institutions is the buying rate plus a commission of 1.5 percent, and a commission of 1 percent is applied to purchases by the public sector. Debt-service payments, including debt conversions, of the Central Government are conducted at the official rate of L 2 = US$1.

Separate exchange rates derive from an arrangement that permits exporters to Costa Rica, El Salvador, and Guatemala to transfer their foreign exchange proceeds to importers at freely negotiated exchange rates.

Hungary

The exchange rate of the forint against currencies other than those of the member countries of the former CMEA, Albania, and the Democratic People’s Republic of Korea is derived on the basis of a weighted basket of 11 currencies; the weights are adjusted annually and reflect the currency composition of Hungary’s foreign trade turnover with the nonruble currency area. The value of the forint in terms of the basket is adjusted at irregular intervals, notably on the basis of the difference between the domestic and foreign rates of inflation.

The largest portion of Hungary’s trade and financial settlements with the member countries of the former CMEA is settled in transferable rubles through the IBEC, and with Albania, Cambodia, the Democratic People’s Republic of Korea, and the Lao People’s Democratic Republic in clearing rubles. Official exchange rates for the transferable ruble and the clearing ruble are, in principle, quoted daily by the National Bank, although these rates remain fixed for longer periods. The National Bank also quotes exchange rates for the forint against the currencies of the former CMEA, Albania, and the Democratic People’s Republic of Korea. These rates are used for noncommercial settlements; for example, international travel, expenses of diplomatic representation, and scholarships are based on multilateral agreements or, in some cases, on supplemental bilateral agreements.

Since the beginning of 1991, trade and financial settlements previously conducted in transferable or clearing rubles have been settled in convertible currencies. The prices used for these transactions are no longer determined by intergovernmental agreement, but by prices prevailing in world markets, except for those orders placed before the end of 1990. At the same time, most noncommercial transactions have also been conducted in convertible currencies, except for tourist travel to Czechoslovakia.

Also, since the beginning of 1991, the National Bank of Hungary has not quoted exchange rates for the forint against the currencies of the member countries of the former CMEA, Albania, and the Democratic People’s Republic of Korea.

Islamic Republic of Iran

The official rate in the Islamic Republic of Iran is fixed in terms of the SDR by Bank Markazi (the central bank). The official rate in terms of the U.S. dollar is determined daily on the basis of the SDR-rial rate. This rate mainly applies to exports of oil, imports of essential goods, military items, certain raw materials and machinery, foreign exchange allowances for certain invisibles, and public sector capital transactions.

In addition, the exchange rate system also consists of two “incentive” rates that apply to non-oil exports, a “preferential” rate and a “competitive” rate that apply to certain imports, a “service” rate used for some invisibles, and the “free” market rate that applies only to Iranian nationals residing in the Republic.

Jamaica

Exchange rates for the Jamaica dollar are market determined under an Interbank Foreign Exchange Trade System (interbank foreign exchange market). The interbank foreign exchange market is operated by the commercial banks and the Bank of Jamaica. In addition to receipts from exports of bauxite, alumina, sugar, bananas, proceeds from official loans and investments and tourism receipts, which must be surrendered directly to the Bank of Jamaica, the commercial banks are also required to surrender 30 percent of their foreign exchange purchases to the Bank of Jamaica at the previous day’s average weighted buying rate plus a spread of J$0.03.

The forward market for foreign exchange is operated by the commercial banks at rates negotiated with their customers under certain Bank of Jamaica regulations. The Bank of Jamaica reserves the right to participate in the forward market and provides exchange rate guarantees to certain importers who use extended credit facilities.

Lesotho

The currency of Lesotho is pegged, at parity, to the South African rand, which, under the Common Monetary Area (CMA) Agreement, is also legal tender in Lesotho.

Under the “financial rand” system, local sales proceeds of CMA securities and other investments owned by non-CMA residents cannot be transferred in foreign currency but must be retained in the form of financial rand balances. These balances are transferable among nonresidents at a freely determined exchange rate and may be used to purchase securities and to finance investments in new firms and certain properties.

Liberia

The Liberian dollar is pegged to the U.S. dollar at $1 = US$1; the currency of the United States is legal tender in Liberia and circulates along with Liberian coins and the $5 note.

U.S. dollar notes, which used to form the major portion of the currency in circulation, have almost totally disappeared from circulation. Full convertibility between the Liberian dollar and the U.S. dollar at par does not actually exist. The U.S. dollar attracts a substantial premium in large parallel market transactions, and abnormally high commissions are charged by commercial banks for their sales of offshore funds.

Foreign exchange dealers other than banks are permitted to buy and sell currencies other than the U.S. dollar at market-determined exchange rates.

Mexico

Two exchange markets operate in Mexico: a controlled market covering specified transactions amounting to about 70 percent of all trade and payments transactions, and a free market. The controlled market rate is set under a managed float system guided by a set of indicators. The free market rate is determined by market forces, although the Bank of Mexico intervenes in this market to minimize the spread between the two rates. Transactions at the controlled market rate include merchandise trade with some exceptions, royalties for the use of foreign technologies and patents, principal and interest payments for financial and suppliers’ credits by the public and private sectors, Mexican foreign service expenses, and Mexico’s membership contributions to international organizations.

Eligible participants in the controlled market may choose to complete the transaction at a retail sale, agreed between participants and the banks, or at the “equilibrium exchange rate,” which is determined for the controlled market each day at a fixing session during which representatives of the major banks exchange bids for purchases and sales of foreign exchange.

Within the free market, no limitations apply to the access to ownership or to the transfer of foreign exchange.

Mozambique

The exchange rates for the metical, which is pegged to a trade-weighted basket consisting of ten major currencies, are published daily by the Bank of Mozambique, which is the central bank as well as the major commercial bank.

Since October 1990, a secondary market for foreign exchange in which exchange rates are to be determined freely by supply and demand has been in operation. Authorized operators are free to set buying and selling rates in the secondary market.

Nicaragua

There are two currencies in circulation in Nicaragua, the córdoba and the córdoba oro, which was issued on August 10, 1990 and is valued at parity with the U.S. dollar. On December 31, 1990, the official buying and selling rates for the córdoba were C$3,000,000 and C$3,060,000 per U.S. dollar, respectively. In addition, there is an unrecognized parallel market in which the value of the córdoba varies with respect to the official rate. Only the Central Bank, the authorized commercial banks, and the authorized exchange houses can buy and sell foreign exchange; transactions outside the banking system and the authorized exchange houses are prohibited.

On March 4, 1991, the authorities announced that the córdoba would be withdrawn by the end of April 1991, and the córdoba oro (CO) would be the only legal tender at an exchange rate of C$5,000,000 = CO 1. On the same date, the córdoba oro rate was devalued from parity to CO 5 = US$1 with the U.S. dollar peg maintained.

Nigeria

The exchange system consists of interbank foreign exchange dealings (IFED) (authorized dealers) and a daily allocation of foreign exchange to foreign exchange dealers by the Central Bank and dealings between banks and their customers. After certain deductions, the Central Bank allocates official foreign exchange receipts to the authorized dealers through a Dutch auction system. Successful bidders in the auction receive an allocation that is based on their relative size (measured in terms of capital). Authorized dealers are then free to sell foreign exchange to their customers for purposes of making payments abroad consistent with Nigeria’s exchange regulations. The applicable exchange rate for each authorized dealer is based on the rate quoted by that dealer on that day; dealers must sell foreign exchange at a margin of not more than 1 percent between buying and selling rates.

Foreign exchange bureaus that can freely buy foreign currency notes from, and sell them to, their clients and, to a lesser extent, only buy traveler’s checks from their clients, have been in operation since August 1989. The exchange rate in this market differs from the rate in the IFED.

Peru

The external value of the inti is freely determined by participants in the exchange market on the basis of supply and demand conditions.

An exchange tax of 0.5 percent is levied on foreign exchange proceeds from exports of goods and services and on purchases of foreign exchange for imports of goods and services. Commercial banks may charge a commission of 0.25 percent.

Philippines

The exchange rate for the peso is determined on the basis of demand and supply in the exchange market. However, the authorities intervene when necessary to maintain orderly conditions in the exchange market and in light of their policy objectives in the medium term.

Under the Private Corporate Sector Foreign Currency Debt Repayment Program administered by the Private Debt Restructuring and Repayment Corporation (PDRRC), corporate debtors and their foreign creditors are provided with options for arranging repayments and rescheduling, with partial forward exchange cover provided if desired by the debtor; full forward cover is provided only for financially distressed borrowers. To be eligible for the program, debt must be non-trade-related; owed to a bank or financial institution, except multilateral agencies and foreign government agencies that are members of the Paris Club; outstanding and duly registered with the Central Bank as of October 17, 1983; and falling due between October 17, 1983 and December 31, 1986 or between January 1, 1987 and December 31, 1992. Under both partial (75 percent) and full (100 percent) forward cover, the PDRRC provides an exchange rate to the debtors that is set at the central bank selling rate for U.S. dollars prevailing on the date that the eligible debt was effectively entered into the program.

Poland

The National Bank of Poland (NBP) officially sets the exchange rate of the zloty, which is pegged to the U.S. dollar. Generally, it sets rates at least once a week, normally on Thursdays, to become effective when they are published on the following Monday.

The exchange rate on the parallel exchange market, in which natural persons are allowed to transact freely, is determined by market forces and may differ from the official rate set by the NBP. However, interest rate policy is geared in part to limiting the differential between two exchange rates, and, during 1990, the parallel market exchange rate remained closely in line with the official rate. Foreign exchange bureaus must have licenses to operate in the parallel exchange market.

Romania

The official exchange rate used for all transactions in convertible currencies is defined in terms of a basket of six currencies reflecting the geographical pattern of Romania’s trade and payments. Weekly adjustments are made in the leu/U.S. dollar rate in such a way as to maintain the central point on the basket Peg.

The currency used for commercial transactions with the member countries of the former CMEA, Albania, and the Democratic People’s Republic of Korea was the transferable ruble. For nontrade transactions with the CMEA countries, Albania, and the Democratic People’s Republic of Korea, special exchange rates were established by multilateral or bilateral agreement.

On February 18, 1991, an interbank market was introduced, in which the exchange rate is determined through auction-type fixing. The official exchange rate (pegged to a basket of currencies) remained in effect. It is applied to purchases by exporters of foreign exchange that is not retained by them and to the sale of foreign exchange for imports of a limited number of products. Also, with effect from January 1, 1991, all transactions with former CMEA countries, Albania, and the Democratic People’s Republic of Korea have been taking place in convertible currencies, and the transferable ruble has been abolished.

Sao Tome and Principe

The external value of the dobra is determined by a basket of currencies of the nine major trading partners to which it is pegged.

Foreign exchange transactions are divided into three categories for the purpose of assessing charges on purchases and sales of foreign exchange: (1) import payments, (2) transactions in foreign checks, and (3) collection of export proceeds.

For import-related transactions, when a letter of credit is opened, a charge of 1.125 percent of the import value is payable, with an additional commission to the National Bank of 0.5 percent. A stamp duty of Db 2 per Db 1,000 of import value, plus a flat Db 50, is also payable, as well as a postage levy of Db 50. Any change in the letter of credit carries a further charge of Db 150.

For the collection of foreign checks, the National Bank applies a commission in favor of the collecting foreign correspondents, varying according to the particular bank. In addition, the National Bank charges a postage levy of Db 20 for each transaction, together with a stamp duty of Db 15.

For the collection of export proceeds, the National Bank charges a commission of 0.25 percent when a letter of credit is opened and a further 0.125 percent when funds are received. In addition, a postage levy of Db 500 is charged.

Somalia

The official exchange rate for the shilling, which is pegged to a basket of currencies of Somalia’s main trading partners, is adjusted weekly to reflect changes in the cross rates of currencies in the basket and the relative rates of inflation in Somalia and its trading partners. The official exchange rate applies to imports of goods and services and debt-service payments of the Government.

The exchange rate in the free market is negotiated freely between resident holders of foreign exchange accounts, that is, export/import accounts and external accounts.

South Africa

South African authorities intervene in the exchange market to affect the rates quoted by the commercial banks for the “commercial” rand.

The Reserve Bank provides special rand forward cover at preferential rates in respect of import financing offered to and accepted by South African importers. In addition, special rand “offsetting” forward cover at preferential rates may be applied to swap transactions in respect of preshipment financing for South African exporters.

The freely floating “financial” rand system operates with respect to the local sale and redemption proceeds of South African securities and other investments in South Africa owned by nonresidents, capital remittances by emigrants and immigrants, and approved outward capital transfers by residents. The exchange rate for the financial rand is usually at a discount from the commercial rand rate; at the end of 1990, the discount was about 25 percent.

Sudan

Sudan has two exchange markets: (1) the official market in which the exchange rate for the Sudanese pound is pegged to the U.S. dollar, and (2) a commercial bank market in which the rate is, in principle, determined by a bankers’ committee composed of representatives of seven commercial banks; in practice, the commercial rate is set by the Bank of Sudan.

All export proceeds are converted at the commercial bank market rate, with some exceptions on cotton and gum arabic. The commercial banks also purchase the remittances of Sudanese nationals working abroad.

Along with the portions of cotton and gum arabic exports not covered under the commercial bank rate, other transactions under the official rate include government loans, most grants, selected invisibles, imports of petroleum products, a range of intermediate goods, government imports, and debt service.

For transactions under the bilateral payments arrangement with Egypt, the official rate is used for invisibles and the commercial rate is used for all other transactions.

Suriname

The guilder is pegged to the U.S. dollar at Sf 1.78876 = US$1. There is no exchange market in Suriname. A “conversion rate” of Sf 5 = US$1 is used for the valuation of “own-funds” imports, and the Government sells most goods obtained under bridging assistance from the Netherlands at a special conversion rate of Sf 2.50 per f. 1.

Syria

The official rate applies to most export transactions, loans, grants, and other budgetary receipts, as well as to most public sector imports, public sector invisible payments, and capital transactions.

The promotion rate applies to private remittances, most travel and tourism transactions, transfers of Syrian government employees abroad, some export proceeds, and medical expenses.

In addition, a portion of proceeds from exports of fruits and vegetables, along with a number of items previously under the promotion rate, is subject to the “rate in neighboring countries” as determined by the Central Bank.

Another official rate, the “rate to promote exports,” determined by the Ministry of Economy and Foreign Trade, is applied to public sector export proceeds authorized by the ministry.

Tunisia

The exchange value of the dinar is determined according to a basket of currencies. The buying and selling rates for foreign currencies are fixed daily by the Central Bank of Tunisia.

The Central Bank extends exchange rate guarantees to development banks in respect of commitments entered into before August 1988 (some of which involve loans with final maturity in the year 2000), with premiums based on domestic and international interest rates.

Uganda

Uganda has two exchange markets: the official and the foreign exchange bureau market. The external value of the official rate is determined on the basis of a trade-weighted basket of currencies. The exchange rate in the foreign exchange bureau market is determined by supply and demand conditions. In its foreign exchange dealings, the Bank of Uganda charges a commission of 1.4 percent buying and 2.6 percent selling. Authorized foreign exchange bureaus are permitted to buy and sell foreign exchange at market-determined rates. At present, the official rate is applied to all government imports, debt-service payments, imports of oil, imports under project aid, open general licenses, and special import programs. Proceeds from coffee exports and official loans and grants are channeled through the official market. All other transactions can take place at the bureau rate.

Uruguay

The exchange rate system in Uruguay is operated as a managed float.

A tax of 2.0 percent is levied on sales of foreign exchange in both the spot and forward exchange markets if a transaction is settled in Uruguayan new pesos; the tax rate is 0.05 percent for sales of foreign exchange through interbank operations.

Venezuela

Venezuela maintains a unified, interbank exchange system under which the currency is allowed to float in response to market forces. The Central Bank quotes daily reference exchange rates for the bolívar in terms of the U.S. dollar, which are the modes of the buying and selling rates at the closing of the interbank market.

The state-owned Petroleum Corporation and its affiliates are obliged to sell to the Central Bank their foreign exchange earnings at the average interbank selling rate minus 10 centavos. The Central Bank’s reference exchange rate applies mainly to disbursements and debt-service payments associated with public and publicly guaranteed external debt and imports of goods and services by the Central Government. All other current and capital transactions are effected through the interbank foreign exchange market at the unified, market-determined rate.

Viet Nam

The exchange rate of the dong is quoted in terms of the U.S. dollar by the State Bank of Viet Nam. Adjustments to the exchange rate, aimed at maintaining the spread with the parallel market exchange rate within a range of 10–20 percent, are made at irregular intervals in light of developments in the parallel foreign exchange market, the domestic gold price, internal commodity prices, and international prices. Banks are authorized to set the exchange rates up to a maximum of 5 percent above the official exchange rate and may set a spread of 2 percent between the buying and selling rates.

Western Samoa

The exchange rate of the tala is determined on the basis of a fixed relationship between the tala and a weighted basket of currencies of Western Samoa’s main trading partners.

An exchange levy of 1 percent is charged on gross sales of foreign exchange.

Republic of Yemen

The Yemeni rial is pegged to the U.S. dollar and is set at YRls 12.01 = US$1 as of December 31, 1990. The Central Bank of Yemen is the main buyer and seller of foreign exchange in the domestic banking system.

There is an informal market for foreign exchange involving money changers who, although legally not permitted to operate in foreign exchange transactions, transact in small amounts and within reasonable margins.

Zaïre

The official exchange rate of the zaïre is determined in a weekly interbank fixing session in which the Bank of Zaïre is usually the only seller of foreign exchange. The official rate is determined by the Bank of Zaïre on the basis of foreign exchange demand and information on parallel market exchange rate developments.

A parallel market with a substantial spread from the official exchange rate exists. Transactions at the official rate cover only a small part of foreign exchange transactions in Zaïre.

Zambia

On February 19, 1990, a dual exchange system, comprising the official exchange rate (OER) and the market exchange rate (MER), was introduced. The OER is fixed in terms of the SDR, and the Bank of Zambia purchases foreign exchange at the OER for all remittances of the copper company and at the MER for all other transactions. The Bank of Zambia sells foreign exchange at the OER for official imports of oil and fertilizer, for payments to the International Air Transport Association, and for the foreign exchange requirements of the copper company. It sells foreign exchange at the MER for specified imports and certain service payments. The MER is adjusted to reflect demand and supply conditions. On December 31, 1990, the OER stood at K 42.5 per US$1, while the MER was K 47.4 per US$1.

Exporters are also informally authorized to sell to importers foreign exchange retained under the export retention scheme; this sale, on December 31, 1990, was at the rate of about K 80 per US$1.

Zimbabwe

The exchange rate of the Zimbabwe dollar is determined on the basis of a fixed relationship to a trade-weighted basket of currencies. The spread applied by the Reserve Bank of Zimbabwe between the buying and selling rates is 0.8 percent for major currencies and 1.0 percent for other currencies. An additional 0.25 percent on either side of the quoted rates of major currencies may be charged by authorized dealers (authorized commercial and merchant banks). A tax of 20 percent is levied on sales of foreign exchange for purposes of holiday travel.

Forward exchange contracts are permitted only for trade transactions. The Reserve Bank is prepared to cover forward transactions and, at present, quotes fixed discount and/or premium rates for major currencies. The Reserve Bank purchases foreign exchange at the spot preferential telex transfer rate quoted to authorized dealers, less 0.35 percent for three-month contracts and an additional 0.10 percent for each month beyond, up to 0.65 percent for a six-month contract. Sales of foreign exchange take place at the spot preferential telex transfer rate plus 0.65 percent for three-month contracts and an additional 0.30 percent for each month up to 1.55 percent for a six-month contract.

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