02.5.AREAER 2012 Forreading
02.5.AREAER 2012 Forreading
02.5.AREAER 2012 Forreading
on
Exchange Arrangements
and Exchange Restrictions
2012
CD-ROM Edition including Overview
Cataloging-in-Publication Data
International Monetary Fund.
Annual Report on exchange arrangements and exchange restrictions
[electronic resources]. 1979–
Continues: International Monetary Fund. Annual Report on exchange
restrictions, 1950–1978
1. Foreign exchange—Law and Legislation—Periodicals.2. Foreign exchange
administration—Periodicals. 1. Title
K4440.A13 157 2007 341.7’5179-644506
ISSN 0250-7366
ISBN 978-1-61635-408-4
Contents
Preface. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Compilation Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Afghanistan Djibouti
Albania Dominica
Algeria Dominican Republic
Angola Ecuador
Antigua and Barbuda Egypt
Argentina El Salvador
Armenia Equatorial Guinea
Aruba Eritrea
Australia Estonia
Austria Ethiopia
Azerbaijan Fiji
The Bahamas Finland
Bahrain France
Bangladesh Gabon
Barbados The Gambia
Belarus Georgia
Belgium Germany
Belize Ghana
Benin Greece
Bhutan Grenada
Bolivia Guatemala
Bosnia and Herzegovina Guinea
Botswana Guinea-Bissau
Brazil Guyana
Brunei Darussalam Haiti
Bulgaria Honduras
Burkina Faso Hong Kong Special Administrative Region
Burundi Hungary
Cambodia Iceland
Cameroon India
Canada Indonesia
Cape Verde Islamic Republic of Iran
Central African Republic Iraq
Chad Ireland
Chile Israel
China Italy
Colombia Jamaica
Comoros Japan
Democratic Republic of the Congo (DRC) Jordan
Republic of Congo (Congo) Kazakhstan
Costa Rica Kenya
Côte d’Ivoire Kiribati
Croatia Korea
CuraÇao and Sint Maarten Kosovo
Cyprus Kuwait
Czech Republic Kyrgyz Republic
Denmark Lao P.D.R.
1Note: The term “country,” as used in this publication, does not in all cases refer to a territorial entity that is a state as under-
stood by international law and practice; the term also covers some territorial entities that are not states but for which statistical
data are maintained and provided internationally on a separate and independent basis.
Preface
The Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER) has been published by
the IMF since 1950. It draws on information available to the IMF from a number of sources, including that
provided in the course of official staff visits to member countries, and has been prepared in close consultation
with national authorities.
This project was coordinated in the Monetary and Capital Markets Department by a staff team directed
by Karl F. Habermeier and comprising Roy Baban, Mehmet Ziya Gorpe, Ivett Jamborne, and Annamaria
Kokenyne. The Special Topic was prepared by Tahsin Saadi and Tao Sun. The AREAER draws on the special-
ized contribution of that department (for specific countries), with assistance from staff members of the IMF’s
five area departments, together with staff of other departments. The report was edited and produced by Linda
Griffin Kean of the External Relations Department with assistance from Lucy Scott Morales.
Abbreviations
Note: This list does not include acronyms of purely national institutions mentioned in the country chapters.
COMESA Common Market for Eastern and Southern Africa (Burundi, Comoros, Democratic
Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar,
Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda,
Zambia, Zimbabwe)
EAC East African Community
EBRD European Bank for Reconstruction and Development
EC European Council (Council of the European Union)
ECB European Central Bank
ECCB Eastern Caribbean Central Bank (Anguilla, Antigua and Barbuda, Dominica,
Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the
Grenadines)
ECCU Eastern Caribbean Currency Union
ECOWAS Economic Community of West African States (Benin, Burkina Faso, Cape Verde,
Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger,
Nigeria, Senegal, Sierra Leone, Togo)
ECSC European Coal and Steel Community
EEA European Economic Area
EFSF European Financial Stability Facility
EFSM European Financial Stability Mechanism
EFTA European Free Trade Association (Iceland, Liechtenstein, Norway, Switzerland)
EIB European Investment Bank
EMU European Economic and Monetary Union (Austria, Belgium, Cyprus, Estonia,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands,
Portugal, Slovak Republic, Slovenia, Spain)
EPZ Export processing zone
ERM Exchange rate mechanism (of the European monetary system)
EU European Union (formerly European Community); Austria, Belgium, Bulgaria,
Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland,
Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, United Kingdom)
FATF Financial Action Task Force on Money Laundering (of the OECD)
FDI Foreign direct investment
FEC Foreign exchange certificate
FSU Former Soviet Union
G7 Group of Seven advanced economies (Canada, France, Germany, Italy, Japan, United
Kingdom, United States)
GAFTA Greater Arab Free Trade Agreement
GCC Gulf Cooperation Council (Cooperation Council for the Arab States of the Gulf;
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates)
GSP Generalized System of Preferences
IBRD International Bank for Reconstruction and Development (World Bank)
IMF International Monetary Fund
LAIA Latin American Integration Association (Argentina, Bolivia, Brazil, Chile, Colombia,
Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela)
LC Letter of credit
LIBID London interbank bid rate
Overview
This volume (63rd issue) of the Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER)
provides a description of the foreign exchange arrangements, exchange and trade systems, and capital controls
of all IMF member countries.1 The AREAER reports on restrictions in effect under Article XIV, Section 2, of
the IMF’s Articles of Agreement in accordance with Section 3 of Article XIV, which mandates annual reports
on such restrictions. It also provides information related to Paragraph 16 of the 2007 Surveillance Decision,
which restates the obligation under the IMF’s Articles of Agreement of each member country to notify the
IMF of the exchange arrangement it intends to apply and of any changes in the arrangement.
The AREAER attempts to provide a comprehensive description of exchange and trade systems, going beyond
exchange restrictions or exchange controls. In addition to information related to restrictions on current
international payments and transfers and multiple currency practices (MCPs) maintained under Article XIV
of the IMF’s Articles of Agreement, it includes restrictions and MCPs subject to the IMF’s jurisdiction in
accordance with Article VIII, Sections 2(a) and 3.2 The report also provides information on the operation
of foreign exchange markets and controls on international trade. It describes controls on capital transactions
and measures implemented in the financial sector, including prudential measures. In addition, it reports on
exchange measures imposed by member countries for security reasons, including those notified to the IMF in
accordance with relevant decisions by the IMF Executive Board.3
This report provides detailed information on the de jure and de facto exchange rate arrangements of mem-
ber countries. The de jure arrangements are reported as described by the country authorities. The de facto
exchange rate arrangements are classified into 10 categories.4 The classification is based on the information
available on members’ de facto arrangements, as analyzed by the IMF staff, which may differ from countries’
officially announced (de jure) arrangements. The methodology and the characteristics of the categories are
described in the Compilation Guide that follows this Overview.5
The AREAER aims to provide timely information. In general, the report includes a description of exchange
and trade systems as of December 31, 2011. However, changes in member countries’ exchange rate arrange-
ments are reflected as of April 30, 2012, and in some cases, reference is made to other significant develop-
ments through July 31, 2012.
1 The IMF has 188 member countries, but since South Sudan joined the IMF only in April 2012, information on its exchange
regime will be first reported in the 2013 AREAER. In addition to 187 IMF member countries, this report includes informa-
tion on Hong Kong SAR (People’s Republic of China) as well as Aruba and Curaçao and Sint Maarten (all Kingdom of the
Netherlands).
2 The information on restrictions and MCPs consists of verbatim quotes from each economy’s most recent published IMF staff
report as of December 31, 2011, and represents the views of the IMF staff, which may not necessarily have been endorsed by the
IMF Executive Board. In cases of unpublished IMF staff reports, the quotes have been included verbatim in the AREAER with
the express consent of the member country. In the absence of such consent, the relevant information is reported as “not publicly
available.” If countries implement changes to these restrictions after the relevant IMF report has been issued, these changes will
be reflected in a subsequent issue of the AREAER, covering the year during which the IMF staff report with information on
such changes is issued.
3 The information on exchange measures imposed for security reasons is based solely on information provided by country
authorities.
4 The categories of exchange rate arrangements are (1) hard pegs comprising (a) exchange arrangements with no separate
legal tender and (b) currency board arrangements; (2) soft pegs consisting of (a) conventional pegged arrangements, (b) pegged
exchange rates within horizontal bands, (c) crawling pegs, (d) stabilized arrangements, and (e) crawl-like arrangements; (3) float-
ing regimes, under which the exchange rate is market determined and characterized as (a) floating or (b) free floating; and (4) a
residual category, other managed arrangements. These categories are based on the flexibility of the arrangement and the way it
operates in practice—that is, the de facto regime is described, rather than the de jure or official description of the arrangement..
5 Effective February 2, 2009, the classification methodology was revised to allow for greater consistency and objectivity of
classifications across countries and improved transparency in the context of the IMF’s bilateral and multilateral surveillance.
To facilitate easy comparison, a single table provides an overview of the characteristics of the exchange and
trade systems of all IMF member countries; see the Summary Features of Exchange Arrangements and
Regulatory Frameworks for Current and Capital Transactions in Member Countries. The Country Table
Matrix lists the categories used in the database, and the Compilation Guide includes definitions and explana-
tions used by member countries to report the data and for use in interpreting this report.
The AREAER is available in several formats. This summary Overview of the year’s developments—together
with the Summary Features of Exchange Arrangements and Regulatory Frameworks for Current and Capital
Transactions in Member Countries, the Country Table Matrix, and the Compilation Guide—is available
in print and online, and the detailed information for each of the 190 member countries and territories is
included on a CD enclosed with the printed summary and in an online database, AREAER Online. In addi-
tion to the information on the exchange and trade system of IMF member countries in 2011, AREAER
Online contains historical data published in previous issues of the AREAER. It is searchable by year, country,
and category of measure and allows cross-country comparisons for time series.6
•• In contrast to the previous year, there was an increased use of foreign exchange auctions not only to manage
foreign reserves but also to influence the exchange rate as countries intensified their interventions. Auctions
can provide a transparent framework for selling or buying foreign exchange, and so they were also used
occasionally for specific short-term purposes.
•• Unlike during 2010–11, changes in forward transactions gravitated toward easing, in part to remove mea-
sures introduced during the crisis. Nonetheless, there was some tightening in forward foreign exchange
markets to address concerns about the potential for derivative transactions to cause financial instability.
Taxes on foreign exchange transactions were adjusted in both directions in response to variations in capital
inflows.
•• The number of IMF member countries accepting the obligations of Article VIII, Sections 2(a), 3, and 4,
increased to 168 when Mozambique accepted them as of May 20, 2011. Nineteen member countries con-
tinue to avail themselves of the transitional arrangements under Article XIV. New member South Sudan
has yet to decide whether it accepts the obligations of Article VIII, Sections 2(a), 3, and 4.
•• Restrictions on current payments and transfers continued to decline slightly, although the number of coun-
tries imposing restrictive measures increased by one. Some exchange restrictions and MCPs were removed
in the context of Mozambique’s acceptance of the obligations of Article VIII, Sections 2(a), 3, and 4 in
2011. While the decline in the total and average number of restrictive measures suggests some overall eas-
ing, the overall direction of the resulting economic effects is difficult to ascertain because the measures vary
widely in scope and economic impact.
•• The trend continued toward greater current account openness. The regulatory framework eased consider-
ably for exports and imports and for current invisible transactions. There was significant liberalization
during the reporting period, in particular with respect to repatriation and surrender of export proceeds and
advance payments for imports, which suggests that more countries are seeking external sources of growth
by facilitating exports and abating concerns about circumvention of capital controls.
•• The overall trend toward liberalization of capital transactions masks two major underlying developments:
continued liberalization by countries that are in the process of opening up their financial accounts, and
adjustments in capital controls in response to changes in the global environment, particularly changes in
capital flows to emerging market economies. A weakened global economic outlook and heightened risk
aversion slowed net inflows to emerging market economies during the second half of 2011, and some
emerging market economies also experienced net outflows. These followed a period of strengthened con-
trols, and likely intensified efforts to ease inflow controls as a means of addressing concerns about reduced
access to foreign funds.
•• The changes made by various countries in their financial sector regulations during 2011 and early 2012 can
be seen as part of broader efforts to strengthen the financial regulatory framework, motivated by lessons
learned from the financial crisis and concerns about capital flow volatility. Several measures harmonized
domestic financial regulations with revised international frameworks and sought to increase liquidity buf-
fers or strengthen host-home supervisory cooperation. The overall tightening of capital control measures in
the financial sector may indicate that nondiscriminatory prudential measures have been found insufficient
to deal with the financial stability concerns in some countries. A tightening of prudential measures and an
easing of capital controls with respect to institutional investors also reflect the ongoing liberalization efforts
of some member countries and the continued enhancement of the regulatory framework for institutional
investors.
The remainder of this overview highlights the major developments covered in this issue of the AREAER.
Details of member countries’ exchange arrangements and their regulatory frameworks for current and capital
transactions are presented in the individual country chapters, which are available on the CD enclosed with
the printed Overview or through AREAER Online.
This section documents major changes and trends in the following related areas: exchange rate arrangements, foreign exchange
intervention, monetary anchors, and the operation and structure of foreign exchange markets. It also reports on significant
developments with respect to exchange taxes, exchange rate structures, and national currencies. There are nine tables within this
section. Table 1 summarizes the detailed descriptions in the country chapters by reporting each IMF member country’s mon-
etary policy framework as indicated by country officials and classification of their de facto exchange rate arrangements. Table 2
breaks down countries’ de facto exchange rate arrangements for 2008–12. Table 3 highlights changes in the reclassification of
the de facto exchange rate arrangements between January 1, 2011, and April 30, 2012. Table 4 outlines IMF member coun-
tries’ monetary anchors, and Table 5 reports other changes related to the exchange rate and monetary policy frameworks. Table
6 presents the structure of the foreign exchange markets in the membership, and Table 7.a reports changes regarding foreign
exchange markets. Last, Tables 7.b and 7.c report changes in currency and exchange rate structures and exchange subsidies and
taxes, respectively.
Table 1. De Facto Classification of Exchange Rate Arrangements and Monetary Policy Frameworks, April 30, 2012 (continued)
Table 1. De Facto Classification of Exchange Rate Arrangements and Monetary Policy Frameworks, April 30, 2012 (continued)
Table 1. De Facto Classification of Exchange Rate Arrangements and Monetary Policy Frameworks, April 30, 2012 (concluded)
tions in the foreign exchange markets. Switzerland left this group (now, other managed), owing to increased
official activity in its foreign exchange markets. Poland was classified as floating for part of the reporting
period before being returned to its previous classification (free floating).
Table 3. Changes and Resulting Reclassifications of Exchange Rate Arrangements, 2011–12 (continued)
Table 3. Changes and Resulting Reclassifications of Exchange Rate Arrangements, 2011–12 (continued)
Table 3. Changes and Resulting Reclassifications of Exchange Rate Arrangements, 2011–12 (continued)
Table 3. Changes and Resulting Reclassifications of Exchange Rate Arrangements, 2011–12 (continued)
Table 3. Changes and Resulting Reclassifications of Exchange Rate Arrangements, 2011–12 (concluded)
Monetary Anchors8
The exchange rate no longer retains its dominant role as an anchor for monetary policy in member countries
(Table 4). The most noteworthy changes between April 2011 and April 2012 were in the number of countries
using the U.S. dollar as an exchange rate anchor (it declined the most) and the number of countries classi-
fied as having other monetary frameworks (it increased the most). Overall, 10 countries were recategorized,
reflecting developments in their official monetary anchors9 and further improved reporting.10 As shown in
Table 1, the share of members using as a monetary anchor either the U.S. dollar (43) or a composite (13) both
decreased, whereas the share of members using the euro (27) or other single currency (8) remained the same.
Fifty-five member countries have an officially announced fixed exchange rate policy—either a currency board
or a conventional peg—which implies the use of the exchange rate as the unique monetary anchor. Among the
66 countries that have floating exchange rate arrangements—floating or free floating—the monetary anchor
does not refer to the exchange rate and varies among monetary aggregates (14), inflation targeting (30), and
other (22, including the 17 euro area countries). The 15 countries implementing soft pegs and other managed
arrangements target monetary aggregates. The 28 countries with either stabilized or crawl-like arrangements
rely on a variety of monetary frameworks, including monetary aggregates and inflation-targeting frameworks.
Other managed arrangements, apart from six countries that use exchange rate anchors, are equally split
between monetary aggregate targets and other monetary policy frameworks.
•• The share of IMF members with the exchange rate as the main policy target fell below half, from 51.1 per-
cent to 47.9 percent. Countries with hard pegs or conventional pegs make up three-quarters of this group.
Three currency unions—the Central African Economic and Monetary Community (CAEMC), Eastern
Caribbean Currency Union (ECCU), and Western African Economic and Monetary Union (WAEMU)
—have in place exchange rate anchors for their respective common currency. However, these countries
account for less than 20 percent of global output and world trade. Exchange rate anchors are by far the first
choice of small, open economies, as suggested in the economic literature.
8 Monetary anchors are defined as the main intermediate target the authorities pursue to achieve their policy goal (which is
overwhelmingly price stability). The inventory of monetary anchors is based mainly on members’ declaration in the context of
the yearly AREAER update or Article IV consultations.
9 The officially announced monetary anchor may differ from the anchor implemented in practice as a result of the de facto
exchange rate arrangement.
10 For the 2010 reporting year, country officials were asked for the first time to report specific information about the mon-
etary policy framework, and as a result the information provided by officials improved considerably. Further improvement was
observed for the 2011 data.
•• The U.S. dollar maintained its position as the dominant exchange rate anchor, but the share of countries
using it as an exchange rate anchor continues to erode, having decreased by more than 10 percent since
April 2008. Five countries changed their monetary policy frameworks from exchange rate anchor to the dol-
lar during 2011–12: Angola, Lao P.D.R., and Sudan now have other monetary policy frameworks that still
include the U.S. dollar in their policy basket ); Malawi targets a monetary aggregate; and Vietnam anchors
its exchange rate to a basket of currencies. Countries that continue to anchor to the dollar also include those
with moderate trade relations with the United States.
•• There was no change in the share or composition of countries using an exchange rate anchor to the euro.
These countries generally have a common history with European countries, such as the Communauté
financiére d’Afrique (CFA) franc area countries, or strong trade relations with western Europe, includ-
ing central and eastern European countries such as Bulgaria, former Yugoslav Republic of Macedonia,
Montenegro, and San Marino.
•• Thirteen countries (one fewer than in 2011) anchor their exchange rate to a currency composite. Four track
the SDR as the sole currency basket or as a component of a broader reference basket; one tracks a euro-
dollar basket; two Pacific Island countries track a composite that includes the Australian and New Zealand
dollars in combination with major global currencies; and the remaining six countries do not disclose the
composition of their reference currency baskets. During the reporting year, both Belarus and Tunisia aban-
doned the euro-dollar basket as their primary monetary anchor and moved to another monetary policy
framework. Vietnam described its monetary policy framework as managed floating with reference to a
currency basket consisting of currencies from countries with which it has trading, finance, or investment
relationships. Russia uses a bicurrency basket as the operating benchmark for transactions in the foreign
exchange market, but it also monitors a range of indicators in conducting monetary policy.
•• The number of countries with an exchange rate anchor to another single currency remained unchanged
(8). Two of these countries use the Australian dollar as their legal currency, and one has a currency board
arrangement with the Singapore dollar. The remaining five have conventional pegged arrangements, three
with the South African rand and two with the Indian rupee. Half the countries in this group are landlocked,
bordering either partially or exclusively the country whose currency they use as their exchange rate anchor.
Most IMF member countries, representing the overwhelming share of global output, are split among mon-
etary aggregate targeting, inflation targeting, and other (which includes monetary policy not committed to
any specific target).
•• The number of countries targeting a monetary aggregate remained 29. This category does not include any
country with a free floating exchange rate arrangement; in fact, monetary aggregates are often the choice
of economies with less developed financial markets and managed exchange rates. The objective of the
arrangement is to influence consumer prices and eventually asset prices through the control of monetary
aggregates. Reserve money is often used as the operational target to control credit growth through the credit
multiplier. During the past year, two countries switched from monetary aggregate targeting to inflation
targeting or other monetary framework (Dominican Republic and Solomon Islands), but two declared
monetary aggregate targeting to be their sole monetary anchor (Kyrgyz Republic, Malawi).
•• The 32 countries that directly target inflation are mostly middle income but include some advanced
economies as well. Of these, 30 have either floating or free floating exchange rate arrangements, a policy
framework that requires considerable monetary authority credibility to make up for the loss of transparent
intermediate targets.11 A few countries refer to their monetary framework as “inflation targeting light,”
suggesting that they also consider indicators other than inflation. During the past year, one country,
Dominican Republic, joined this group by adopting inflation targeting as its formal monetary policy.
•• The 38 countries that are not committed to any specific target (the “other” column in Table 1) include
many of the largest economies such as the euro area, Japan, and the United States, where the monetary
authorities have sufficient credibility to implement the monetary framework without a specific monetary
anchor. Countries in this category also include those with multiple monetary anchors, often including an
11 Inflation targeting aims to address the problem of exchange rates and monetary aggregates that do not have a stable relation-
ship with prices, making intermediary targets less suitable for inflation control.
exchange rate anchor. For example, Tunisia previously anchored its exchange rate to a euro-dollar basket,
but its monetary policy framework has been reclassified as “other” because it now includes monetary aggre-
gates in the policy mix, along with the exchange rate anchor. Lao P.D.R. and Sudan have also switched to
other monetary policy frameworks, indicating that they now use a monetary policy mix that includes the
U.S. dollar. The other countries that joined this group are Angola, Belarus, and Solomon Islands.
Intervention Purpose
Official interventions increased during this reporting cycle in response to increased exchange rate pressure
resulting from uncertain growth prospects for major emerging market economies and the worsening euro
area crisis. Emerging market economies experienced exchange rate pressure in both directions, while several
advanced economies experienced massive appreciation pressure. The heightened intervention activity was
evident in self-reporting, various market reports, and significant changes in some members’ foreign exchange
reserves.
Intensified strains in the euro area induced capital flows into safe havens, putting heavy pressure on these
currencies and spurring an overall upsurge in official involvement in foreign exchange markets. For example,
Switzerland announced a ceiling to stop the franc’s appreciation; Japan intervened several times in 2011.
The crisis in Europe also had adverse effects on several regional emerging market economies. The Polish zloty
and the Turkish lira, for example, faced substantial depreciation pressure, and both countries reacted by pro-
viding foreign exchange liquidity to the market. The Turkish central bank also implemented macroprudential
measures to constrain sharp movements in the exchange rate.
Intervention Techniques
Direct purchases and sales of foreign exchange remain the most popular form of intervention. Japan resumed
such interventions in September 2010 for the first time since 2004, and it continued them in 2011. In March
2011, following a sharp rise in foreign exchange volatility as a result of the earthquake in Japan, other Group
of Seven (G7) authorities participated in a coordinated intervention to sell Japanese yen. However, these
interventions did not exceed the limit allowed for a de facto free floating arrangement. Poland intervened in
the foreign exchange market in the form of foreign exchange sales directly by the central bank. Mexico sus-
pended its monthly put option auctions,13 which had been used to intervene in the foreign exchange market
since 2010. Instead, in November 2011, it reinstated a mechanism to trigger foreign exchange sales in case of
a depreciation of more than 2 percent from the previous day; this mechanism had not yet been used through
the end of April 2012. Israel ceased its foreign exchange interventions in August 2011. As a result, both Israel
and Mexico were subsequently reclassified as free floating.
Russia continued to ease the rules guiding its interventions by further widening the band for allowable fluc-
tuations and reducing the size of interventions. Similarly, Guatemala widened the fluctuation margin trigger-
ing interventions, and Uganda made several increases in its daily purchases of foreign exchange in a bid to
build up its reserves.
12 Preannounced programs of purchase and/or sale of foreign exchange typically do not qualify as interventions because the
design of these programs minimizes the impact on the exchange rate. Very small, retail-type transactions are also disregarded.
13 The put option auctions gave option holders the right to sell U.S. dollars to the central bank, provided the exchange rate
had appreciated to more than its 20-day moving average.
Table 5. Changes in Exchange Rate Arrangements, Official Exchange Rate, and Monetary Policy Framework, 2011–12
Country Change
Albania Effective January 16, 2012, the Bank of Albania changed the purpose of its medium-term foreign reserves
requirement to cover more than four months of imports and the short-term external debt of the country.
Previously, the purpose was to meet the net international reserves target.
Azerbaijan Effective January 20, 2011, the peg against the euro-dollar basket was abandoned, and a bilateral peg against
the U.S. dollar was adopted.
Barbados Effective August 3, 2011, the Central Bank of Barbados reduced its selling rate on currency trades from 2.035
Barbados dollars (BDS$) per U.S. dollar to BDS$2.015 per U.S. dollar, thereby lowering the margin for
trades between authorized dealers and the general public.
Belarus Effective January 1, 2011, the central exchange rate of the band was adjusted to the actual value of the
currency basket (1,054.68 rubels (Rbl)) established December 31, 2010. Previously, it was Rbl 1,036.27.
Belarus Effective May 24, 2011, the National Bank of the Republic of Belarus (NBRB) devalued the central exchange
rate to 1810 rubels against the currency basket, widened the exchange rate band from ±10% to ±12%, within
which the exchange rate may weaken or strengthen relative to the value of the basket, and reinstated a limit on
over-the-counter trading of a 2% deviation from official rubel exchange rates.
Belarus Effective October 20, 2011, the NBRB devalued the official exchange rate, thereby unifying the official and
black market exchange rates at the market rate. The NBRB introduced a single trading session, abolished the
official exchange rate bands, and introduced a managed floating regime.
Belarus Effective October 20, 2011, the de jure exchange rate regime was reclassified from a pegged exchange rate
within a horizontal band to a managed floating regime.
Brazil Effective July 1, 2011, the calculation of the reference exchange rate is based on the average of four daily
surveys with the Central Bank of Brazil’s foreign exchange dealers. Previously, the reference exchange rate was
calculated as the average of rates in actual spot transactions weighted by their size.
Brunei Effective January 1, 2011, the Autoriti Monetari Brunei Darussalam (AMBD) replaced the Brunei Currency
and Monetary Board (BCMB). All powers, assets, and liabilities of the BCMB were transferred to the AMBD.
Burundi Effective March 12, 2012, the Bank of the Republic of Burundi began calculating the exchange rate on the
basis of the buying and selling operations conducted by commercial banks with their customers. Previously, it
was based on its auctions (Marché des Enchères Symétriques en Devises).
Chile Effective January 5, 2011, the Central Bank of Chile (CBC) launched a foreign currency purchasing program
aimed at strengthening its international liquidity position through daily auctions to buy US$50 million up to
a total of US$12 billion.
Chile Effective December 16, 2011, auctions under the foreign currency purchasing program ended with the
completion of US$12 billion in purchases by the CBC.
China Effective April 16, 2012, the floating band of the renminbi’s (RMB’s) trading prices against the U.S. dollar in
the interbank foreign exchange market was widened from 0.5% to 1%—i.e., on each business day, the trading
prices of the RMB against the U.S. dollar in the interbank foreign exchange market may fluctuate within
a band of ±1% around the central parity released on the same day by the China Foreign Exchange Trading
System. The spread between the RMB and the U.S. dollar selling and buying prices offered by foreign-
exchange-designated banks to their customers may not exceed 2% of the central parity (previously 1%).
Costa Rica Effective April 18, 2011, the foreign exchange purchase program, which started in September 2010 for
accumulating international reserves, was completed as the US$600 million target was reached. This program,
to the extent that it did not seek to influence the exchange rate in a given direction, helped to increase the
confidence of economic agents (reserves as "insurance") and strengthen Costa Rica’s international liquidity
position; by virtue of its precautionary nature, it had been put in place by the Central Bank of Costa Rica
(BCCR) as part of a financial policy rather than an exchange rate policy.
Costa Rica Effective February 25, 2012, in order to reinforce the economy's "financial shield," the Board of Directors of
the BCCR, in Article 7 of meeting 5532-2012 of January 25, 2012, agreed to implement a program to build
international reserves for the period from February 1, 2012, to December 31, 2013, up to a maximum of
US$1,500 million.
Dominican Effective January 1, 2012, pursuant to a resolution on December 15, 2011, the Monetary Board authorized
Republic the Central Bank of the Dominican Republic to adopt explicit inflation targeting as its monetary policy
framework.
Table 5. Changes in Exchange Rate Arrangements, Official Exchange Rate, and Monetary Policy Framework, 2011–12
(continued)
Country Change
Egypt Effective April 1, 2011, new official restrictions were imposed on bid-ask spreads quoted by authorized foreign
exchange dealers: (1) the client bid rate was allowed to move from 150 basis points below the interbank bid
rate up to a maximum equal to the interbank bid rate; and (2) the client offer rate must be within a range of
50 to 150 basis points above the interbank offer rate. Previously, there were no official restrictions on bid-ask
spreads quoted by authorized foreign exchange dealers.
Guatemala Effective January 1, 2011, the annual inflation target was maintained at 5.0% ±1% for 2011.
Guatemala Effective January 1, 2011, the fluctuation margin (added to or subtracted from the five-day moving average of
the exchange rate) used to determine whether the Bank of Guatemala may intervene in the foreign exchange
market was widened from 0.5% to 0.6%, in accordance with Monetary Board Resolution No. JM-161-2010.
Guatemala Effective January 1, 2012, the annual inflation target was set at 4.5% ±1% for 2012.
Guinea Effective July 28, 2011, transactions of commercial banks with their customers were bound within a band of
±3% around the last rate set during the weekly auctions.
Honduras Effective July 25, 2011, the Central Bank of Honduras reactivated the crawling band system that had been in
operation until mid-2005.
Iraq Effective January 17, 2012, the Central Bank of Iraq slightly reduced the level around which it stabilizes the
exchange rate from 1,170 dinars (ID) per U.S. dollar to ID 1,166.
Japan Effective March 18, 2011, in the extraordinary circumstances following the earthquake and tsunami, the
Ministry of Finance (MOF), in coordination with other G7 countries, intervened in the foreign exchange
market by selling 692.5 billion yen (¥).
Japan Effective August 4, 2011, the MOF intervened in the foreign exchange market by selling ¥4,512.9 billion.
Japan Effective October 31, 2011, the MOF intervened in the foreign exchange market by selling ¥9,091.6 billion
from October 31 through November 4, 2011.
Kazakhstan Effective February 25, 2011, the trading band that had been established in February 2009 against the U.S.
dollar was abandoned.
Kazakhstan Effective February 28, 2011, a transition to a managed floating exchange rate regime was announced.
Accordingly, the de jure exchange rate arrangement was reclassified to managed floating from a pegged
exchange rate within horizontal bands. (NBRK Board’s Resolution No. 18 of February 15, 2011).
Malawi Effective May 7, 2012, the Reserve Bank of Malawi (RBM) devalued the kwacha (MK) from MK 168 to MK
250 per U.S. dollar.
Malawi Effective May 7, 2012, in anticipation of devaluation, the RBM took steps aimed at allowing market forces to
determine the exchange rate and at improved availability of foreign exchange in the market. Accordingly, the
RBM implemented the revised Guidelines for Foreign Exchange Trading Activities, allowing for more market
determination of the exchange rate.
Maldives Effective April 11, 2011, the Maldives government adopted a new exchange rate regime under which the
rufiyaa (Rf ) floated within a band of 20% in either direction around a central parity of Rf 12.85 per U.S.
dollar. Accordingly, the de jure exchange rate arrangement was classified as a pegged exchange rate within
horizontal bands. Previously, it was a conventional pegged arrangement, with the rufiyaa pegged to the U.S.
dollar at a buying rate of Rf 12.75 per U.S. dollar and a selling rate of Rf 12.85 per U.S. dollar.
Mexico Effective November 30, 2011, the Bank of Mexico (BOM) temporarily suspended the mechanism of monthly
put option auctions until further notice. Previously, the BOM used the put options as an intervention
mechanism, giving the buyer the right to sell U.S. dollars when the exchange rate appreciated above its 20-day
moving average. The BOM sold put options for US$600 million each month from February 2010 through
October 30, 2011, and the BOM bought foreign exchange amounting to US$9.08 billion from option
holders who exercised these options 50 times during the same period.
Mexico Effective November 30, 2011, the BOM announced that it would sell up to US$400 million daily through
auctions at a minimum price that is 2% below (1.02 times the Mexican peso per U.S. dollar) the previous
day’s average in the event of a more than 2% depreciation from the previous day. This mechanism was not
used by April 30, 2012.
Mozambique Effective August 11, 2011, a new mechanism for determining the exchange rate was adopted for transactions
with the government, public entities, and the World Bank which seeks to prevent potential deviations
between the rate used by the Bank of Mozambique in its foreign exchange transactions and the interbank
foreign exchange market rate.
Table 5. Changes in Exchange Rate Arrangements, Official Exchange Rate, and Monetary Policy Framework, 2011–12
(continued)
Country Change
Myanmar Effective April 2, 2012, the Central Bank of Myanmar (CBM) reference rate is used to set the midrate in the
retail thein phyu (TP) market and in the wholesale/interbank market for authorized dealers.
Myanmar Effective April 2, 2012, the de jure exchange rate arrangement was reclassified to a managed float from a
conventional peg to the Special Drawing Right (SDR) at K 8.50847 per SDR, with the elimination of the
official exchange rate.
Myanmar Effective April 2, 2012, the cut-off rate in the daily foreign exchange auction held by the CBM is used as the
CBM reference exchange rate for that day’s trading. Previously, the kyat was officially pegged to the SDR at K
8.50847 per SDR within a margin of ±2%.
Nigeria Effective November 21, 2011, the Central Bank of Nigeria adjusted the midpoint of the target exchange
rate from 150 naira per U.S. dollar to 155 naira per U.S. dollar with a soft exchange rate band of ±3%
(unchanged) to accommodate continued downward exchange market pressure.
Paraguay Effective May 18, 2011, the Central Bank of Paraguay published Resolution No. 22 (Resolución Nº 22
Acta Nº 31) regarding the implementation of information technology and the transition from the previous
monetary policy regime.
Russia Effective March 1, 2011, the Bank of Russia (BR) took the following actions: (1) It widened the band
of allowable fluctuations of the ruble (Rub) from Rub 4 to Rub 5. (2) It reduced the size of accumulated
interventions on the band’s edge by 5 kopeks from US$650 million to US$600 million.
Russia Effective December 27, 2011, the BR widened the band of allowable fluctuations from Rub 5 to Rub 6
and reduced the size of accumulated interventions on the band’s edge by 5 kopeks from US$600 million to
US$500 million.
Russia Effective July 24, 2012, the BR widened the band of allowable fluctuations from Rub 6 to Rub 7 and reduced
the size of accumulated interventions on the band’s edge by 5 kopeks from US$500 million to US$450
million.
San Marino Effective March 27, 2012, the Republic of San Marino signed a new Monetary Agreement with the European
Union repealing the previous Monetary Agreement dated November 29, 2000. The new agreement authorizes
San Marino to use the euro as its official currency, to grant legal tender status to euro banknotes and coins,
and to issue limited quantities of euro coins (as did the former agreement). Under the new agreement,
San Marino commits to adopt the relevant EU legislation (on euro banknotes and coins; fighting fraud
and counterfeiting; banking and financial legislation, including the prevention of money laundering; and
statistical reporting requirements). The new agreement will come into effect upon notification of the EU of
the completion of the ratification by the parliament of San Marino.
Sierra Leone Effective March 16, 2011, the weekly auction amount was increased from US$700,000 to US$1 million.
Solomon Islands Effective February 1, 2011, even though the method of exchange rate calculation was not changed, the
currency composition and weights of the basket, which are determined on the basis of the volume and
direction of the country’s trade, were updated.
Suriname Effective January 20, 2011, the authorities devalued the currency by 20% vis-à-vis the U.S. dollar in the
official market. With the devaluation, the authorities set a band of Surinamese dollars (SRD) 3.25–3.35
per U.S. dollar, within which all official and commercial market transactions are allowed to take place.
In conjunction with the devaluation, the authorities also did away with the subsidy for imports of infant
formula.
Tajikistan Effective April 28, 2011, the new rules for calculating the official exchange rate of somoni against the U.S.
dollar take into account only exchange rates within a range of ±1.5% to calculate the weighted average.
Tajikistan Effective April 28, 2011, the official exchange rates of somoni against the euro and Russian ruble are
calculated according the rules for determining cross rates using the ratio of the official exchange rate against
the U.S. dollar and the exchange rates of the U.S. dollar against the given currencies that are established on
the international foreign exchange markets on the same day until 4:00 p.m. Previously, the official exchange
rates vis-à-vis the euro and Russian ruble were determined based on the average of buying and selling
transactions in the interbank and intrabank foreign exchange markets.
Tunisia Effective January 1, 2011, the Central Bank of Tunisia (CBT) started posting the volume of transactions
between authorized intermediaries (IATs) and the volume of its daily interventions in the interbank foreign
exchange market on its website. Previously, the CBT did not release intervention data to the public.
Tunisia Effective April 18, 2012, a fixing (i.e., the average of market participants’ quotes) replaced the currency
composite as the reference exchange rate published by the CBT.
Table 5. Changes in Exchange Rate Arrangements, Official Exchange Rate, and Monetary Policy Framework, 2011–12
(concluded)
Country Change
Uganda Effective July 1, 2011, the Bank of Uganda’s (BOU’s) operational target is the monthly average seven-day
interbank money market rate. The central bank rate (CBR), which is BOU’s policy rate, was first set at
11% during the shadow run conducted in June 2011. The CBR was subsequently set at 13% when the new
framework took effect in July 2011, with a band of ±4%.
Uganda Effective November 4, 2011, the BOU increased the amount of daily reserve buildup purchases to US$1
million from US$0.5 million.
Uganda Effective December 5, 2011, the BOU increased the amount of daily reserve buildup purchases to US$1.7
million from US$1 million.
Uganda Effective February 20, 2012, the BOU revised the framework for reserve buildup from purchasing a fixed
daily amount of US$1.7 million to purchasing amounts between US$1 and US$2 million daily, in response
to the sharp oscillation of the shilling during February 2012.
United States Effective March 18, 2011, following a sharp rise in foreign exchange volatility as a result of the March
2011 earthquake in Japan, on March 18, 2011, U.S. monetary authorities participated in a coordinated
G7 intervention to sell Japanese yen. The operation, which was divided evenly between the U.S. Treasury
Department’s Exchange Stabilization Fund and the Federal Reserve System’s Open Market Account, was
coordinated with Japanese monetary authorities, the European Central Bank, and Canadian and U.K.
monetary authorities.
United States Effective January 25, 2012, the Federal Open Market Committee (FOMC) announced that inflation at the
rate of 2%, as measured by the annual change in the price index for personal consumption expenditures, was
most consistent over the longer term with the Fed’s statutory mandate. In setting monetary policy, the FOMC
will seek to mitigate deviations of inflation from its longer-term goal and deviations of employment from the
FOMC’s assessment of its maximum level.
Venezuela Effective January 11, 2011, the Central Bank of Venezuela unified the official exchange rate at Bs 4.30 per
U.S. dollar from Bs 4.30 and Bs 2.60 per U.S. dollar. The implicit rate in the Transaction System for Foreign-
Currency-Denominated Securities (SITME) remains 5.30 per U.S. dollar. Previously, the exchange rate
structure was multiple, with the following rates: (1) Bs 4.30 per U.S. dollar, official rate for most imports; (2)
Bs 2.60 per U.S. dollar, official rate for imports of food, medicine, and machinery (priority goods); and (3)
Bs 5.30 per U.S. dollar for SITME transactions. Accordingly, the exchange rate structure was changed from
multiple to dual.
Vietnam Effective February 11, 2011, the State Bank of Vietnam (SBV) devalued the dong by increasing the average
interbank exchange rate by 9.3% against the U.S. dollar.
Vietnam Effective February 11, 2011, the SBV narrowed the transaction band to ±1% from ±3% around the average
interbank exchange rate.
Zambia Effective April 2, 2012, with a view to transitioning from reserve money targeting to interest rate targeting by
establishing a key policy interest rate, the Bank of Zambia introduced the “Bank of Zambia Policy Rate” as
another anchor of monetary policy.
this reporting period. Chile’s foreign exchange purchase program lasted from January through December
2011 with a total of US$12 billion in preannounced accumulated purchases in daily auctions. Colombia
extended daily direct purchase auctions to build up reserves several times and changed the parameters of
its volatility options mechanism. Paraguay started to hold foreign exchange auctions while continuing its
bilateral foreign exchange operations with banks, albeit at a diminished pace. Myanmar began to hold for-
eign exchange auctions to support the managed floating exchange rate regime in a significant step toward a
more market-oriented and unified exchange rate system. These auctions will also help further develop the
interbank market. Hungary launched a program of foreign exchange sales to provide banks with liquidity
for a specific purpose, although this was discontinued after five months.14
•• The number of countries with allocation systems decreased by one (to 30). Myanmar no longer provides
foreign exchange at official rates for certain public sector imports and instead relies on a regular multiple-
price auction to support the interbank market. Foreign exchange allocation is often used to provide foreign
exchange for strategic imports, such as oil or food, when foreign exchange reserves are scarce. When these
arrangements result in rationing, they can give rise to exchange restrictions.
•• Only Belarus and Mauritania continue to operate fixing sessions on a regular basis. Serbia retains the option
of using fixing sessions when necessary to stabilize the foreign exchange market. Although Syria indicated
using fixing sessions during this reporting period, the extent and regularity of its operations are unknown.
Libya stopped holding fixing sessions and uses both a foreign exchange standing facility and an allocation
system. Fixing sessions are more characteristic of an early stage of market development, when they help
establish a market clearing exchange rate in a shallow market with less-experienced market participants.
14 The objective of the foreign exchange auctions was to provide banks with foreign currency to close their open positions
arising from early repayment of foreign-currency-denominated mortgages by their clients. Banks could voluntarily participate in
the auctions, in which all bids close to prevailing foreign exchange market rates were accepted.
million to 100 million Guinean francs. Morocco raised the limit on the amount that cash exchange bureaus
in duty-free lounges are allowed to hold. Serbia modified the regulation regarding the excess amount of
dinars that exchange bureaus are required to transfer into their current accounts with banks by extending the
period during which such transfers must be made (easing) but lowering the threshold that defines the excess
amount (tightening). Ukraine increased the ceiling on the daily amount of foreign exchange an individual
may purchase (easing), while beefing up the requirement to present identification and proof of residency of
clients (tightening).
The majority of members refrain from restricting exchange rate spreads and commissions in the interbank
market. The number of countries that allow authorized dealers to freely determine their bid-ask spreads and
commissions in the interbank market increased by 21 to 105. A number of countries report controls on
interbank currency pricing, including Botswana, China, the Democratic Republic of the Congo, Haiti, and
Saudi Arabia. The spread limits are often agreed among market participants in the context of market-making
or other ad hoc agreements. These limitations are generally implemented in the context of fixed or stabilized
exchange rate arrangements.
There were several developments in currency pricing. Belarus repealed the restriction that limited banks’
exchange rates to within 2 percent of the official rate. China widened the interbank trading fluctuation band
from ±0.5 percent to ±1 percent around the central parity released on the same day by the China Foreign
Exchange Trading System. Guinea cancelled banks’ commissions and fees in cash for foreign exchange trans-
actions with clients. Myanmar, as part of a transition to a more flexible exchange rate regime, introduced
a number of measures in foreign exchange trading in order to unify the multiple exchange rate system by
imposing a transaction range of ±0.8 percent around the reference rate for banks’ transactions with clients and
±0.3percent around the reference rate for interbank trading.
Other Measures
Most of the changes in other measures during the reporting period refer to taxes on foreign exchange transac-
tions and forward and swap operations (Tables 7.a and 7.b).
•• Unlike during 2010–11, changes in forward transactions gravitated toward easing (see Table 7.a): there were
six easing and five tightening measures and two neutral changes. For example, China, in a series of steps,
permitted and extended the trading in renminbi–foreign currency swaps. In order to gain more control over
foreign exchange market volatility, Israel introduced a 10 percent reserve requirement on nonresidents’ swap
and forward transactions, followed six months later with a reporting requirement on these transactions.
Lebanon imposed a maximum limit of 8 percent of bank capital on margin shortages. Pakistan limited
the currency forward terms between 1 and 12 months, and Sri Lanka to 90 days. As part of its foreign
exchange market liberalization efforts, Ukraine authorized banks to trade in foreign exchange swaps among
themselves. Fiji gave permission to authorized banks to write net forward sales up to 20 million Fiji dol-
lars. Among the neutral changes, the Central Bank of Nigeria began to engage in foreign exchange forward
transactions with authorized dealers.
•• There was no change in the number of countries maintaining dual or multiple exchange rate structures
(see Table 7.b). Madagascar’s exchange rate structure changed to unitary from dual with the elimination
of a preferential exchange rate for oil importers, while the exchange rate structure of Kyrgyz Republic was
reclassified as dual as the official rate may differ by more than 2 percent from market rates because it is
based on the average transaction-weighted rate of the preceding day. Currently, 22 countries are classified
as having more than one exchange rate, of which 15 are dual and 7 multiple. This is a result mainly of spe-
cific exchange rates applied for certain transactions or actual or potential deviations of more than 2 percent
between official and other exchange rates.
•• There were a few changes with respect to foreign exchange taxes and subsidies (see Table 7.c). Aruba
revoked the exemption from foreign exchange commissions for transactions settled in Netherlands Antilles
guilders. Responding to changes in capital inflows, Brazil took a series of steps that increased financial
operations taxes on various types of foreign exchange transactions through the first half of 2011 and eased
some of these taxes by granting a number of exemptions as well as reducing the rates after December 2011.
Foreign exchange taxes appear to be most popular in African countries, followed by members in the western
hemisphere. Overall, 32 countries (one more than last year) tax foreign exchange transactions. On the other
hand, only two countries (Serbia and Sudan) have foreign exchange subsidies in place benefiting certain
export sectors.
•• Finally, a series of neutral changes were recorded (see Table 7.b). A few members introduced new coins or
notes (Malta, Mozambique). The government of Zambia approved the plan to rebase the kwacha during
2012. Estonia adopted the euro.
Table 7. b. Changes in Currency and Exchange Rate Structures, 2011–12 (concluded)
Table 7. c. Changes in Exchange Subsidies and Exchange Taxes, 2011–12 (concluded)
This section gives a brief overview of the status of IMF members’ acceptance of the obligations of Article VIII,
Sections 2(a), 3, and 4 of the IMF’s Articles of Agreement. It also describes recent developments in exchange
measures, including exchange restrictions and multiple currency practices (MCPs) subject to the IMF’s juris-
diction under Articles VIII and XIV. In addition, this section covers exchange measures that countries impose
for national and/or international security reasons. This section refers to changes during 2011 and to country
positions as reported in the last IMF staff report issued by the cutoff date, December 31, 2011.
In accepting the obligations of Article VIII, Sections 2(a), 3, and 4, members agree not to impose restrictions
on payments and transfers for current international transactions or engage in discriminatory currency arrange-
ments or MCPs, except with IMF approval. Mozambique accepted these obligations as of May 20, 2011,
increasing to 168 the number of countries that have done so. Nineteen members continue to avail themselves
of transitional arrangements under Article XIV with respect to measures under IMF jurisdiction in effect at
the time they became IMF members.15 IMF staff reports indicate that out of the 19 members, 3 (Afghanistan,
Liberia, Tuvalu) do not have any restrictions; Albania, Angola, Bhutan, and Syria maintain restrictions under
Article XIV only; and 13 maintain restrictions subject to Article VIII.
Exchange Measures
Restrictions and/or multiple currency practices
The number of countries that imposed restrictive measures on current international payments and transfers
increased by 1 to 44 during 2011 (Table 8). The number of restrictions declined slightly, from 100 to 95 mea-
sures, as fewer new exchange measures were identified than eliminated. The average number of restrictions
per member country maintaining such restrictions declined slightly to 2.2. While the decline in the total and
average number of restrictive measures suggests some overall easing, the direction of net economic effects is
difficult to ascertain because the measures vary widely in scope and economic impact.
The total number of Article XIV countries that maintain restrictions or MCPs under Article VIII or Article
XIV declined by 1 to 14, reflecting the elimination of restrictions in Mozambique. Mozambique accounted
for the full decline (by 5) in the total number of restrictions before it accepted the obligations of Article VIII.
The average number of restrictions by each of these Article XIV countries declined slightly to 3.7.
In contrast, the total number of Article VIII countries maintaining restrictions increased by 2 to 30, with a
restrictive measure identified in both Belarus and the Kyrgyz Republic. The number of restrictive measures
maintained by Article VIII countries also increased, lowering slightly the average number of restrictions per
relevant Article VIII member to 4—markedly lower than for Article XIV countries.
There were few changes during 2011 in the types of measures in place. Because of the disaggregation of the
wide variety of measures listed in Table 8, the number of measures in each category is relatively low. Among
Article XIV countries, before Mozambique accepted the obligations of Article VIII, it eliminated five mea-
sures (approval of family remittances, approval of current payments and transfers above a certain threshold, a
restriction on the conversion of nonresident deposits in domestic currency, a restriction on advance payments
for imports, and a restriction on advance payments for a service). Among Article VIII countries, Belarus and
the Kyrgyz Republic adopted exchange rate practices that are considered MCPs. Nepal lifted limits on leisure
travel allowances but imposed a restriction on the transfer of salaries of nonresidents. Suriname adopted an
exchange rate practice deemed an MCP but lifted another MCP by eliminating a special exchange rate for
imports of infant formula.
15 The member countries with Article XIV status are Afghanistan, Albania, Angola, Bhutan, Bosnia and Herzegovina, Burundi,
Eritrea, Ethiopia, Iraq, Kosovo, Liberia, Maldives, Myanmar, Nigeria, São Tomé and Príncipe, Somalia, Syria, Turkmenistan, and
Tuvalu. The exchange regime of Kosovo is under IMF staff review, while that of Somalia will be reviewed as circumstances permit.
Table 8 outlines the types of exchange restrictions and MCPs subject to IMF jurisdiction. Table 9 includes
descriptions of exchange restrictions by country as indicated in the relevant IMF staff reports. Excluded from
Table 9 are member countries that have not consented to publication of exchange restrictions described in
unpublished IMF staff reports.
As shown in Table 8, there are relatively few restrictions on payments for imports, indicating that payments
for external trade transactions are generally unrestricted; when it is considered necessary to control imports,
this is typically done more directly through trade regimes. Restrictions on payments for imports take the form
of advance import deposit or margin requirements (Sudan); restrictions on advance payments (Swaziland); or
requirements to balance imports with export earnings (Bhutan).
The number of restrictions on payments or transfers with respect to invisibles is higher than restrictions
on payments for imports, reflecting some member countries’ practice of conserving foreign exchange by
limiting its use for activities considered low in priority and restraining large transfers of investment income.
Restrictions on invisibles that typically affect individuals include limits on educational allowances, medical
expenses, and travel abroad (Angola, Bhutan, Myanmar, Nepal, Sudan). Restrictions that may have a signifi-
cant effect on the business sector involve restrictions on the payment or transfer of investment income. These
take the form of a requirement to clear taxes and other debts to public sector entities (São Tomé and Príncipe);
an exchange tax on profits (Colombia); restrictions on the payment or transfer of interest from deposits or
bonds (Bangladesh, Iceland); and restrictions and limits on the payment or transfer of profits and dividends
(Angola, Iran, Ukraine).
There are other transaction-specific restrictions. The amortization of external loans is defined as a payment
for current international transaction in Article XXX(d) of the IMF Articles of Agreement. Accordingly, limita-
tions on such amortization give rise to exchange restrictions under IMF jurisdiction (India). Some member
countries impose restrictions on unrequited transfers such as restrictions on transfers of wages and salaries
(Myanmar, Nepal) and private transfers (Angola, Bhutan). Restrictions affecting nonresident accounts arise
mainly through limits on the convertibility or transferability of deposits, the majority of which are related to
frozen foreign exchange accounts in the former Yugoslavia (Bosnia and Herzegovina, Montenegro, Serbia).
Unsettled debit balances on bilateral or regional payments, barter, or clearing arrangements give rise to
exchange restrictions (Albania, Democratic Republic of the Congo, India, Iraq, Syria, Zimbabwe).
Restrictions that have general applicability are listed separately in Table 8. Restrictions in the form of admin-
istered allocation, rationing, or undue delay are imposed by a number of members (e.g., Maldives, Syria).
Other measures in this category include limits on payments above a threshold (Fiji); tax clearance certificates
(Fiji, Iraq); exchange taxes (Angola, Aruba, Gabon); and a requirement to surrender certain export earnings
in exchange for access to the domestic foreign exchange market (Colombia).
Table 8 shows that MCPs arise from a variety of measures. Among these are exchange taxes (Angola,
Colombia); exchange subsidies (Iran); exchange rate guarantees (Tunisia); and multiple price auctions
(Angola, Mongolia, Nigeria, Sierra Leone). Multiple price auctions are often implemented until a well-func-
tioning interbank foreign exchange market develops. When the foreign exchange auction system implemented
by official action allows, or does not prevent that exchange rates at which foreign exchange is sold in each
auction differ from each other by more than 2 percent, the practice is considered an MCP. By far, however,
the most numerous MCPs are those that arise from official actions that cause deviations of more than 2
percent relative to the exchange rate(s) within a market or across markets (or because there is no mechanism
in place to prevent such deviations). Both Article VIII and Article XIV members maintain such practices
(Belarus, Burundi, Democratic Republic of the Congo, Georgia, Guinea, Kyrgyz Republic, Malawi, Maldives,
Mongolia, Myanmar, São Tomé and Príncipe, Suriname, Syria).
Memorandum items:
Average number of restrictions per member
3.31 3.80 3.71 1.59 1.54 1.43 2.20 2.33 2.16
country maintaining restrictions
Number of countries with restrictions 16 15 14 29 28 30 45 43 44
16 See Decision No.144-(52/51) in Selected Decisions and Selected Documents of the International Monetary Fund, Thirty-Sixth
Issue (Washington: IMF, 2012).
most part, these are advanced economies. In general, these restrictions take the form of financial sanctions
to combat financial terrorism or financial sanctions against certain governments, entities, and individuals, in
accordance with UN Security Council resolutions or EU regulations.
Trade-Related Measures
On balance, trade transactions were further liberalized between January 2011 and July 2012. Of the 138
trade-related measures reported by member countries, 74 were easing measures, 45 were tightening measures,
and 19 were neutral. Further liberalization of imports and import payments is the most noteworthy develop-
ment in this area. Exports are generally much less controlled than imports; nevertheless, there was significant
liberalization during the reporting period, in particular with respect to repatriation and surrender of export
proceeds.
17 Association of Southeast Asian Nations: Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand.
Virtually all measures pertaining to advance payments were easing measures. For example, the Philippines
now allows authorized dealers to sell foreign exchange for advance payments without central bank approval.
Serbia abolished the deadline of 180 days for customs clearance of prepaid imports; after one year, prepay-
ments for imports not realized are classified as cross-border credits to be recorded with the central bank. Fiji
increased the limit on import payments and permitted banks to approve the prepayment of term bills for
goods already landed and cleared by customs. India permitted authorized banks to offset export receivables
from and import payments due to the same entity abroad. South Africa and Swaziland raised the permitted
percentage of prepayment for capital goods. In contrast, Belarus prohibited advance payments for imports
using credits from Belarusian banks.
Two reported measures involved taxes. Ecuador raised its tax on financial transactions, including for import
payments. Moldova raised excise taxes on liquefied petroleum gas.
There were other noteworthy miscellaneous measures. Bangladesh raised the ceiling on the overall interest
cost of private sector imports on a usance basis. China implemented its foreign exchange import payment
verification and clearing system reform on a nationwide basis and simplified the foreign exchange import
payment approval process. In the Philippines, import financing of more than six months no longer needs to
be reported to the central bank and letters of credit may remain valid beyond one year.
Export procedures were also simplified and updated to enhance trade in goods. Kazakhstan no longer includes
transaction passports as one of the documents required for customs clearance. (Previously, a transaction
passport completed by the authorized bank servicing the transaction was used to monitor repatriation of
export exchange proceeds exceeding a certain amount.) Kosovo restored reciprocity with Serbia and Bosnia
and Herzegovina; the latter’s acceptance of Kosovo customs seals facilitates transit of exports from Kosovo.
Honduras and Nicaragua were integrated into the electronic data exchange system already in place between
El Salvador and Guatemala.
Payments
A number of IMF member countries eased controls on payments related to travel. For example, India eased
controls for travel by relatives for medical treatment; Fiji for airline ticket sales; and Myanmar, Nepal, Slovak
Republic, and South Africa for travel allowances. Other countries eased limitations on payments for medical
expenses (Fiji, Morocco), educational expenses (Fiji), alimony and court-ordered payments (Fiji), and software
license fees (India). Bangladesh permitted the use of credit cards for payments of membership fees in profes-
sional and scientific institutions and fees related to applications for admission to foreign institutions. Bulgaria
raised the threshold at which payments require documentation. Morocco permitted repayment of credit
card debts incurred by Moroccans previously residing abroad. As part of its foreign exchange system reform,
Mozambique replaced prior approval with registration for current payments. The Philippines eliminated prior
approval of payments for charters and leases of foreign-owned equipment, refunds of unused foreign grants
or loans, payments for underwriting and broker fees, and settlements of deposit insurance claims. South
Africa raised the limit on miscellaneous payments to nonresidents. Ukraine increased the amount of foreign
exchange that residents may purchase daily, and Tonga raised the amount below which authorized dealers may
approve payments for current transactions except travel.
With respect to tightening measures, Argentina stemmed capital outflows by imposing a verification program
for foreign exchange sales to residents for certain tourism and travel transactions. Argentina now also requires
prior approval for payments for professional and technical services and for use of patents and trademarks when
transactions are between related entities or when the beneficiary is a resident of a jurisdiction considered a
tax haven. Belarus prohibited advance import payments using funds borrowed from Belarusian banks. Brazil
increased the financial transactions tax on credit card expenditures abroad, and Ecuador raised the tax levied
on transfers abroad.
Proceeds
Bangladesh permitted authorized dealers to arrange for payment for small-value service exports up to a given
limit per instance. Both Iceland and Nigeria extended the repatriation period for proceeds from certain
invisibles.
In contrast, Bangladesh subjected proceeds from business process outsourcing to a retention quota of 50
percent of the repatriated foreign exchange. To increase international reserves, Barbados required authorized
foreign exchange dealers to surrender 5 percent of gross foreign exchange purchases to the central bank.
Account Transactions
The changes reported by IMF members in regulations for resident and nonresident accounts were largely in
the direction of liberalization, continuing a trend also observed the previous year. The overwhelming major-
ity of the measures introduced since January 2011 were easing measures—22 of 25 measures pertaining to
resident accounts, and 11 of 16 measures pertaining to nonresident accounts. In a related area, regulations on
residents’ opening and maintaining foreign exchange accounts were also eased. Some members relaxed con-
trols on residents’ domestic and foreign currency accounts abroad in the process of liberalizing their financial
accounts.
Resident accounts
Most of the easing measures relating to resident accounts referred to resident accounts in the home country.
For example, Bhutan permitted resident earners of foreign exchange and nonresident Bhutan citizens to have
foreign exchange accounts in Bhutan. Guinea cancelled a 1.25 percent commission on cash withdrawals. To
increase the depth of their foreign exchange markets, Honduras permitted financial institutions to accept
Canadian dollar deposits and India authorized financial institutions to accept any freely convertible currency.
India and Malaysia permitted joint accounts of nonresident and resident individuals who are close relatives.
Latvia permitted the partial deposit freeze on Parex Bank to expire. Sri Lanka allowed expatriate employees
to deposit their salaries in foreign exchange accounts. As part of the ongoing efforts to unify the exchange
rates and the foreign exchange markets, Myanmar eliminated the balancing requirement specifying that
import payments be made out of export earnings and permitted withdrawals in foreign exchange cash up to
US$10,000.
Three countries liberalized the opening and maintenance of resident accounts abroad. As a further step
toward internationalizing the renminbi, China extended nationwide a pilot program to allow export proceeds
of domestic enterprises to be deposited abroad. India permitted residents with overseas direct investments to
open foreign exchange accounts abroad. The former Yugoslav Republic of Macedonia allowed residents that
acquired rights to foreign currency abroad (e.g., pensions) and nonresident Macedonian citizens to maintain
foreign currency accounts abroad.
Regulations on resident accounts were tightened in only two cases. To contain demand for foreign exchange,
Argentina required that withdrawals of foreign currency from ATMs abroad be debited against foreign cur-
rency accounts at home and Iran revoked the rule that enabled residents to purchase up to US$1,000 or its
equivalent in euros to open a foreign exchange account.
Nonresident accounts
The liberalization of nonresident accounts related mainly to specific types of deposits or sources of funds. For
example, India permitted the deposit of proceeds from the sale of foreign direct investment into domestic or
foreign currency accounts. Sri Lanka authorized the deposit of resident payments for purchases of real estate
in Sri Lanka from nonresidents. Tunisia permitted nonresident individuals of Libyan nationality to open con-
vertible Tunisian dinar and foreign currency accounts. Ukraine allowed nonresident investors to credit foreign
currency investment accounts with foreign currency cash and with the proceeds of complete or partial liquida-
tion of investments in Ukraine. In another type of easing measure, Sudan allowed banks to determine cash
withdrawal limits in accordance with respective bank policies, and Croatia revoked the decision governing
the opening and management of nonresident bank accounts, leaving these matters to the discretion of banks.
With respect to tightening measures, Bhutan discontinued domestic currency accounts of nonresident for-
eigners working or residing in or outside Bhutan, mainly in border areas.
Capital Controls
The overall trend toward liberalization of capital transactions masks two major underlying developments:
continued liberalization by many countries that are in the process of opening up their financial account, and
adjustments in capital controls in response to changes in the global environment, especially in capital flows to
emerging market economies. Net inflows to emerging market economies peaked in early 2011, mainly driven
by portfolio and bank flows, as reflected in the fact that the largest group of new measures affected capital
and money market instruments. The second largest group of measures consisted of adjustments to controls
on credit operations. A weakened global economic outlook and heightened risk aversion slowed net inflows
to emerging market economies during the second half of 2011, and some emerging market economies also
experienced net outflows that likely triggered an intensified effort to ease inflow controls to address concerns
about the reduced access to foreign funds. Net inflows to emerging market economies recovered in the first
half of 2012.
Between January 2011 and July 2012, IMF member countries reported 164 measures relating to capital
controls, compared with 147 measures during the analogous period the previous year. Of these 164 mea-
sures, 102 (nearly two-thirds) were easing measures, about the same proportion as the previous year. Of the
remaining measures, 49 were tightening measures and 13 were neutral. Although tightening measures almost
equally affected capital inflows and outflows, measures that affected controls on capital inflows were mostly
eased, partly because there was a rollback of previously introduced limitations on capital inflows and partly
because of the continuing trend toward liberalization of capital flows. The easing of inflow controls was most
pronounced during the second half of 2011, with some further easing in the first half of 2012, most likely in
response to the decrease and partial reversal of capital inflows to emerging market economies. Neutral mea-
sures typically encompassed changes in institutional frameworks and in procedures.
tionalization. Nigeria authorized nonresidents to purchase government securities with maturities of less than
one year. Sri Lanka allowed foreign investors to purchase shares of local companies and removed the ceiling
on interest rates on debentures.
Tightening measures were mainly directed toward improving the composition or reducing the volume of
portfolio inflows. For example, to contain capital inflows in short-term central bank securities, Indonesia
lengthened the minimum holding period for central bank certificates from one month to six months. Pakistan
set a withholding tax on securities, with one rate for maturities between 6 and 12 months and a higher rate
for maturities of less than 6 months and increased the latter. Paraguay prohibited the sale of domestic shares
to entities operating in locales considered tax havens.
There were noteworthy developments in the institutional framework for securities. Cambodia established a
stock market in 2011 and, in early 2012, secondary trading commenced. Moldova set criteria for determina-
tion of the price of minority shares when they are to be bought by majority shareholders.
chase foreign exchange to reduce potential pressure in the foreign exchange market. India tightened the con-
ditions for refinancing external commercial borrowing and foreign currency convertible bonds. In Vietnam,
external loan contracts became subject to approval by the line ministry and by the ministry of finance.
The one reported neutral measure was implemented in Lithuania, where the authority to approve certain
investments by insurance companies abroad was transferred from a supervisory agency to the central bank.
With respect to access to foreign exchange, Ukraine nearly doubled the amount of foreign exchange that can
be purchased daily by an individual. The only tightening measure reported in the category of personal trans-
actions was Ukraine’s elimination of the exemption of foreign exchange purchases below a certain threshold
from the requirements of identification and proof of residency.
18 Capital controls and prudential measures are highly intertwined because of their overlapping application. For example, some
prudential measures (e.g., different reserve requirements for deposit accounts held by residents and nonresidents) also can be
regarded as capital controls because they distinguish between transactions with residents and nonresidents and hence influence
capital flows.
19 Inclusion of an entry in this category does not necessarily indicate that the aim of the measure is to control the flow of capital.
20 See IMF (2011 and 2012).
21 The concept of capital controls in the AREAER is quite similar; it encompasses regulations that influence capital flows and
includes various measures that regulate the conclusion or execution of transactions and transfers and the holding of assets in the
country by nonresidents and abroad by residents.
Provisions specific to
institutional investors 9 0 11 6 9 1 15 9 12 36
Total 95 28 35 25 22 1 120 50 36 206
•• A noteworthy development is that several European countries (among them advanced economies) intro-
duced regulations to strengthen the prudential framework of bank operations (Austria, Bulgaria, Italy,
Kazakhstan, Romania, San Marino, Serbia). Some of these changes harmonized domestic financial regula-
tions with the respective EU directives or aimed at reducing the risks of banking operations by adjusting
regulatory limits, increasing liquidity buffers, or strengthening host-home supervisory cooperation (Austria,
Italy, Romania, San Marino). Serbia harmonized its financial regulations with Basel II standards and
adjusted loan classification and provisioning rules. The loan-to-value ratio on forint-denominated loans
was raised in Hungary to tighten credit conditions. Minimum capital requirements were increased in the
Philippines and, as part of a broader reform of the financial sector regulatory framework, in Moldova.
The new financial regulations adopted in Kazakhstan aim at reducing risks in the operation of banks and
financial organizations. In a bid to increase the share of account transactions and transfers in domestic
and cross-border payments, limitations on cash payments exceeding a certain threshold were adopted in
Bulgaria. Some of the measures adopted in the reporting period enhance anti-money-laundering regulations
(Argentina, Austria, Moldova). In Suriname, the Bank Supervision Law was enacted, considerably strength-
ening the regulatory regime and supervisory powers of the Central Bank of Suriname.
•• Among the easing measures, India advanced its financial sector reform agenda by significantly easing con-
trols on interest rates of certain resident and nonresident deposits. A significant part of the prudential easing
measures affected reserve requirements on local or foreign currency liabilities, as discussed below.
•• In contrast to the previous year, the framework for commercial banks’ foreign exchange risk management
was overwhelmingly tightened, which likely reflected concerns about the risks related to increased vari-
ability in the foreign exchange markets. Foreign exchange exposure limits, which are often imposed in an
asymmetric manner, have been lowered in Kenya, Mauritius, Nigeria, and Ukraine with a view to reduc-
ing banks’ foreign exchange risk and their ability to take a position against the currency.22 In Brazil, the
limit above which banks are required to maintain 60 percent reserves of short positions has been lowered.
To align its domestic regulations with international practice, Latvia and Ukraine allowed inclusion of off-
balance-sheet items in the calculation of banks’ open foreign exchange position.23 To reduce banks’ foreign
exchange exposure through leveraged operations, Peru introduced limits on banks’ foreign exchange deriva-
tive contracts as a percentage of capital, and Korea tightened a similar limit introduced in 2010. Hungary
introduced a foreign exchange funding adequacy ratio to manage the maturity mismatch of banks’ on-
balance-sheet and off-balance-sheet foreign exchange positions. With the stabilization of financial markets,
Paraguay reversed its tightening off the limit on banks’ long foreign exchange position (introduced during
the financial crisis). Armenia switched from regulating banks’ long foreign exchange positions to regulating
the more standard net position limits, allowing banks more flexibility to manage their exchange rate risks.
22 Asymmetric open foreign exchange position limits are often considered capital controls since they have the effect of influ-
encing capital flows.
23 Ukraine’s domestic regulations on banks’ open foreign exchange positions are not yet fully in line with best international
practice because they exclude loan loss provisions on foreign currency loans from calculating the net open positions.
•• Concerned about the systemic risk posed by banks’ unhedged foreign currency lending to residents, sev-
eral countries adjusted their regulatory frameworks (Belarus, Hungary, Romania, Korea, Serbia, Ukraine,
Vietnam). The measures range from prohibitions on foreign exchange consumer lending (Belarus,
Ukraine), lower loan-to-value and debt-to-income ratios (Romania), and prohibitions on bank purchases of
foreign-exchange-denominated bonds issued for won financing (Korea), and a minimum earning require-
ment and proof that debtors have sufficient income in foreign exchange (Hungary). As a transitional mea-
sure, mortgages in foreign exchange were not allowed to be registered in the land registry in Hungary for
a few months until the new regulations on foreign exchange mortgage lending to households were issued.
Capital control measures pertaining to banks and other credit institutions include somewhat more tightening
measures (19) than easing measures (13), indicating that nondiscriminatory prudential measures may not
have been sufficient to deal with the financial stability concerns in some countries.
•• The regulatory framework for external borrowing was strengthened by raising the tax on transactions
(Brazil) or by requiring approval of loans or bond issuances abroad (Vietnam). When pressure in the foreign
exchange market from capital inflows subsequently eased, Brazil reduced the tax rate on longer maturities in
2012. Taxes on financial transactions were extended in Bolivia until April 2012. Several countries tightened
reserve requirements differentiated according to the residency of the deposit holder as well as asymmetric
foreign exchange exposure limits (Costa Rica, Russia, Ukraine). Indonesia reinstated the limit on the daily
balance of banks’ short-term external debt at 30 percent. Latvia introduced a capital charge on banks whose
credit exposure to nonresidents exceeds 5 percent of total assets and/or whose nonresident deposits exceed
20 percent of total assets. Banks’ derivative transactions became subject to reserve and reporting require-
ments in Israel.
•• The majority of the measures easing controls involve credit transactions with nonresidents and residency-
based reserve requirements (Angola, Namibia, Peru, Ukraine). India increased the interest rate ceiling on
nonresident foreign exchange deposits. Ukraine, as part of the process of rolling back temporary measures
introduced during the financial crisis, removed the prohibition against repayment of foreign exchange loans
that have not been converted into local currency. Regulations for derivative transactions were eased in Fiji,
where authorized banks were permitted to write net forward sales contracts up to F$20 million, and in
Malaysia, where resident banks were allowed to enter into ringgit-denominated derivatives.
Reserve requirements have been increasingly used to achieve financial stability objectives and respond to
changes in capital inflows. More than one-third of the measures introduced in 2011 and early 2012 in the
banking sector affect reserve requirements. Twenty countries reported adjusting their reserve requirements
in line with monetary and financial stability objectives. Indicating concerns about monetary management
against the backdrop of volatile capital flows, close to one-half the tightening measures introduced in the
financial sector involved some sort of increased reserve requirements (47), the majority of which were intro-
duced in the first half of 2011.
Depending on the policy objective, reserve requirement ratios are often differentiated according to maturity
(e.g., Korea, Paraguay, Peru, Serbia, Turkey, Vietnam), the denomination of the liability, or residency of the
depositor/lender, with the latter considered capital controls. Most countries that reported adjusting the reserve
requirement during 2011–12 apply different reserve ratios to domestic and foreign currency liabilities, but
only a few set different rates based on the residency of the depositor (e.g., Costa Rica, Peru, Russia).
•• To create a macroprudential liquidity buffer in case of external shocks, several countries increased dif-
ferentiated reserve requirements on local and foreign currency liabilities, imposing higher rates on foreign
exchange liabilities (Bolivia, Georgia, Indonesia, Paraguay, Peru, Suriname, Uruguay).
•• Against the backdrop of volatile capital inflows and inflation concerns, Turkey actively used the reserve
requirement in response to changing external and domestic monetary conditions; following a tightening
cycle at the beginning of 2011, reserve requirements on both local and foreign currency liabilities were
gradually decreased in a differentiated manner, across maturities. Uruguay introduced a marginal reserve
requirement on both local and foreign currency liabilities, which is remunerated, albeit marginal reserves
in peso are remunerated at a lower rate than regular required reserves.
•• Amid persistently high inflation expectations and with a view to preparing for an influx of capital, Russia
set a higher reserve ratio on nonresidents’ liabilities in February 2011 and further increased it in two steps
before April 2011.
•• In contrast, in response to changing liquidity conditions, Angola, India, Turkey, and Yemen decreased their
reserve requirements. In Georgia, longer maturities in local and foreign currency became exempt from the
reserve requirements (maturities over one year for local currency and over two years for foreign currency).
•• To boost demand for local currency (and reduce dollarization), Armenia increasingly set reserve require-
ments on foreign currency deposits in local currency. Such a shift in the denomination of required reserves
usually also has a one-time effect of increasing the supply of foreign exchange in the foreign exchange mar-
ket. Turkey allowed maintaining an increasing share of the required reserves in foreign exchange to boost
CBT reserves. Adjustments in the remuneration of the required reserves and their local currency or foreign
currency component have also been used to influence financial institutions’ decisions on the denomination
of their assets and liabilities (Albania, Croatia, Seychelles).
A tightening of prudential measures and an easing of capital controls with respect to institutional investors
also reflect the ongoing liberalization efforts of some member countries and the continued enhancement of
the regulatory framework for institutional investors. Sixteen member countries reported 20 changes in pru-
dential measures and somewhat fewer (16) changes in capital controls—almost the same numbers as in the
previous reporting period.
•• Nine easing measures were implemented during the reporting period, all of which relaxed capital con-
trols. Most of the measures increased investment opportunities abroad for institutional investors (Bolivia,
Chile, Namibia, Peru, Romania, Serbia). South Africa, continuing the gradual liberalization of its financial
account, allowed resident institutional investors to purchase securities that are registered in the local stock
exchange.
•• Nine reported measures tightened the prudential framework for institutional investors’ operations to
enhance the stability of the financial system. Most of these implemented stricter conditions on institu-
tional investors’ investments abroad. Stricter prudential limits on institutional investors’ foreign exchange
and liquidity position were introduced in Armenia, Colombia, Estonia, and Malawi. Kazakhstan adopted
new regulations to limit the risks in financial institutions’ operations. Armenia and the former Yugoslav
Republic of Macedonia introduced new prudential standards for insurance companies and pension funds,
respectively. In light of further stabilization in the financial sector, Serbia continued reversing earlier pru-
dential easing with respect to insurance companies.
•• Tighter capital controls relate exclusively to institutional investors’ investments, imposing stricter condi-
tions or limits on the investment of pension funds and insurance companies abroad. These measures are
considered capital controls because they discriminate against investment in foreign assets by forbidding,
or setting lower limits on, institutional investors’ investments abroad than on similar investments locally.
Facing sustained capital outflows and significant depreciation pressure, Argentina barred local insurance
companies from holding investments abroad and required primary insurers to repatriate their offshore
funds and investment holdings by the end of 2011. Previously, local insurance companies were allowed to
hold up to 50 percent of their investments and funds abroad. Armenia tightened the conditions for pension
funds’ and investment funds’ investments abroad. The former Yugoslav Republic of Macedonia imposed
new limits on insurance companies’ foreign investments.
Several of the reported changes in provisions specific to the financial sector are recorded as neutral (36).
These changes cannot be linked directly to an easing or tightening of rules, but reflect mainly institutional
or procedural changes. New laws were adopted and existing regulations consolidated in Armenia, Bulgaria,
and Colombia. In Lithuania, a shift of supervisory responsibilities to the Bank of Lithuania required some
regulation changes. Extensive regulatory changes were implemented in Moldova and San Marino that affected
various institutions in the financial sector. Adopting International Financial Reporting Standards accounting
standards triggered some regulatory changes in Moldova and Romania. Finally, some EU member countries
(Austria, Bulgaria) adopted EU directives on payment systems and electronic payments.
Special Topic
countries and 0.90 for the sample used in the empirical part of this paper. The two indices are also highly
correlated with other available de jure indices.27 The broader index was computed only for aggregate capital
flow restrictiveness.
The de jure index is used to identify the sample of countries that have liberalized over the past 15 years. First,
only those countries are retained that have liberalized by at least 0.1 point according to the index between
1995 and 2010. Second, for a given country, only those years are retained following the start of liberalization
where the index declines by at least 0.01 point. Therefore, the sample encompasses only countries that have
liberalized and only those years when controls on capital flows were relaxed. About 37 countries satisfy the
above criteria (Table 11). For those countries, the mean of capital flow liberalization between 1995 and 2010
was 0.4; the maximum was 0.83; and the minimum was 0.1. This sample of countries is used in the empirical
analysis. However, the actual sample for each regression varies with data availability.
Cape Verde
Methodology
The effects of capital flow liberalization were assessed using the following methodology.28 Various panel data
specifications were used to estimate the impact of liberalization on the following variables: capital outflows,
inflows, and net flows; real GDP growth per capita; inflation; equity returns; and capital adequacy ratios. The
most general specification is:
Y jit = α j + β j1Y jit −1 + β j 2 ka jit + β j 3 Z jit + µ ji + ν jit , (1)
where the subscript i denotes the country (i = 1, …,37), the subscript t denotes the year (t = 1995, …, 2010),
and the subscript j denotes the specific equation for each indicator of interest Yj represents the specific equa-
tion for growth, inflation, capital flows, etc.). The approach includes country fixed effects, µ, to take account
of unobserved heterogeneity among countries.29 The variable ka is the measure of capital flows liberalization,
Z is a set of control variables, and v is the error term.
27 The correlation with the Chinn and Ito (2008) index is 0.78 for the narrower index and 0.86 for the broader index for the
period of availability of the Chinn-Ito index.
28 The main data sources are the IMF’s World Economic Outlook (WEO) database and International Financial Statistics (IFS)
database; the World Bank’s World Development Indicators database; Bloomberg L.P.; Haver Analytics; and Thomson Reuters
Datastream.
29 For example, the fixed effect takes account of all time-invariant country-specific factors, including geography, climate,
ethno-linguistic characteristics, and unchanging political and legal systems.
The dynamic specifications capture the potential inertia in the dependent variables. The presence of the
lagged dependent variable in the equations means that all the estimated coefficients represent short-term
effects, which are the focus of this analysis. The long-term effects can be derived by dividing each coefficient
by 1 minus the coefficient of the lagged dependent variable (1 – β1).
Two econometric issues arise in estimating the above equation. First, some independent variables may be
endogenous because of potential simultaneity or reverse causality. Second, with a fixed-effect estimator, the
lagged dependent variable is, by construction, correlated with the error term and is therefore endogenous. As
a robustness check, System Generalized Method of Moments (System GMM) estimators were also used with
all right-hand variables treated as endogenous (Arellano and Bover, 1995; Blundell and Bond, 1998).
Following Kose and others (2009), the full sample is separated into two subsamples using thresholds.
Countries meeting these threshold conditions are presumed to be better able to reap the growth and stabil-
ity benefits of financial globalization. Kose and others (2009) identify four groups of threshold conditions:
financial market development, institutional quality and governance, macroeconomic policies, and trade
integration. In this analysis, a composite indicator is created by first normalizing, then averaging these four
individual indicators: measures for financial development (ratio of market capitalization to GDP or private
sector credit to GDP), quality of bureaucracy and corruption, ratio of fiscal balances to GDP, and ratio of
trade openness (X + M) to GDP.30 Then, the median of the index is taken as a threshold to separate countries
into two groups: those with an index higher than the median are “above threshold” countries, and those with
an index lower than the median are “below threshold” countries.
Results
The econometric analysis, based on the sample of countries that have liberalized over the past 15 years, sug-
gests that more liberalization is associated with the following:
•• Higher real GDP growth per capita: The coefficients of the liberalization index are significantly negative (a
decline in the index means liberalization of capital flows).
•• Lower inflation rates: The coefficients of the liberalization index are significantly positive, indicating that
lower inflation rates are associated with the liberalization.31
•• Higher equity returns: The coefficients of the equity liberalization index are significantly negative, reflecting
the positive impact of liberalization on equity returns.
•• Lower bank capital adequacy ratios: The coefficients of the liberalization index are significantly positive,
indicating that liberalization may reduce bank capital adequacy ratios. This outcome may be due to a higher
credit and asset expansion associated with the liberalization of capital flows. Furthermore, an increase in
riskier assets following the liberalization of capital flows may put downward pressure on capital ratios.
•• Higher capital inflows and outflows: The coefficients of liberalization are significantly negative, demon-
strating the capability of liberalization to promote gross capital flows. However, the effect of liberalization
on net flows is not statistically significant.
Thresholds
The main results of the relationship between the liberalization of capital flows and various dependent variables
for the subsamples of countries “above threshold” and “below threshold” are as follows:
30 To create a single indicator, each variable is first normalized as follows: Index = (actual value – minimum value) / (maximum
value – minimum value). Then subindices are aggregated using the arithmetic mean.
31 Similar results were obtained by Gruben and McLeod (2002) and Gupta (2008). Using an illustrative model, Gupta (2008)
shows that opening the capital account significantly lowers policymakers’ incentive to generate an inflationary shock. Theoretical
and empirical evidence suggest a strong negative relationship between financial openness and inflation.
•• For countries “above threshold,” the main findings in the full sample are generally confirmed, with a few
differences. For example, the coefficients of liberalization are larger than those in the full sample, indicating
a larger role for capital flow liberalization in countries “above threshold.” In other words, countries that are
above the thresholds reap more benefits from liberalization.
•• For countries “below threshold,” the coefficients of liberalization are not significant in most regressions,
including in the growth regression, indicating a limited role for liberalization of capital flows in these
countries.
Robustness Checks
The results are robust to using alternative estimation approaches or different capital flow liberalization
measures:
•• Several other econometric specifications of panel data have been estimated, including System GMM. The
results are broadly similar to those obtained with the fixed effects estimator.
•• Using the broad restrictiveness index of capital flows leads to similar results.
•• A further robustness test is implemented to investigate whether the effects of capital flow liberalization
depend on the size of the country. Since the sample includes small countries and large countries, the effects
of liberalizing capital flows may depend on the size of the country. To ensure that the conclusions are
unaltered in larger countries, the same regression was estimated by using a pooled weighted least squares
estimator, whereby each observation is weighted by the countries’ GDP in U.S. dollars. This approach
assigns more weight to larger economies without eliminating the small countries. Compared with pooled
(unweighted) least squares, the results are broadly similar.32 Therefore, this suggests that the results are also
valid for larger countries.
In sum, liberalizing capital flows may encourage financial integration, promote growth, and lower inflation,
although the liberalization may also be associated with potential risks to financial stability. Countries that
meet some threshold conditions would be better able to reap the growth instability benefits of liberalization.
32 These techniques are not yet well developed for dynamic panel estimations; therefore, the results can only be compared to
pooled least squares estimations.
References
Arellano, Manuel, and Olympia Bover, 1995, “Another Look at the Instrumental-Variable Estimation of
Error-Components Models,” Journal of Econometrics, Vol. 68, No. 1, pp. 29–51.
Blundell, Richard, and Stephen R. Bond, 1998, “Initial Conditions and Moment Restrictions in Dynamic
Panel Data Models,” Journal of Econometrics, Vol. 87, No. 1, pp. 115–43.
Chinn, Menzie D., and Hiro Ito, 2008, “A New Measure of Financial Openness,” Journal of Comparative
Policy Analysis, Vol. 10, No. 3, pp. 309–22.
Gruben, William C., and Darryl McLeod, 2002, “Capital Account Liberalization and Inflation,” Economics
Letters, Elsevier, Vol. 77, No. 2, pp. 221–25.
Gupta, Abhijit Sen, 2008, “Does Capital Account Openness Lower Inflation?” International Economic
Journal, Korean International Economic Association, Vol. 22, No. 4, pp. 471–87.
International Monetary Fund (IMF), 2011, “Recent Experiences in Managing Capital Inflows—Cross-
Cutting Themes and Possible Policy Framework,” IMF Policy Paper (Washington, February). www.imf.
org/external/np/pp/eng/2011/021411a.pdf.
———, 2012, “Liberalizing Capital Flows and Managing Outflows,” IMF Policy Paper (Washington,
March). www.imf.org/external/np/pp/eng/2012/031312.pdf.
Kose M. Ayhan, Eswar Prasad, Kenneth Rogoff, and Shang-Jin Wei, 2009, “Financial Globalization: A
Reappraisal,” IMF Staff Papers, Vol. 56, No. 1, pp. 8–62.
Saadi-Sedik, Tahsin, and Tao Sun, forthcoming, “Effects of Capital Flow Liberalization—What Is the
Evidence from Recent Experiences of Emerging Market Economies?” IMF Working Paper (Washington:
International Monetary Fund).
Schindler, Martin, 2009, “Measuring Financial Integration: A New Data Set,” IMF Staff Papers, Vol. 56, No.
1, pp. 222–38.
Compilation Guide
Exchange Measures
Restrictions and/or multi- Exchange restrictions and multiple currency practices (MCPs) maintained
ple currency practices by a member country under Article VIII, Sections 2, 3, and 4, or under
Article XIV, Section 2, of the IMF’s Articles of Agreement, as specified in
the latest IMF staff reports issued as of December 31, 2011. Information
on exchange restrictions and MCPs or on the absence of exchange restric-
tions and MCPs for countries with unpublished IMF staff reports is
published only with the consent of the authorities. If no consent has
been received, the Annual Report on Exchange Agreements and Exchange
Restrictions (AREAER) indicates “Information is not publicly available.”
Hence, “Information is not publicly available” does not necessarily imply
that the country maintains exchange restrictions or MCPs. It indicates
only that the country’s relevant IMF staff report has not been published
and that the authorities have not consented to publication of information
on the existence of exchange restrictions and MCPs. Because the relevant
IMF staff document may refer to years before the reporting period for
this volume of the AREAER, more recent changes in the exchange system
may not be included here. Changes in the category "Restrictions and/or
multiple currency practices" are reflected in the edition of the AREAER
that covers the calendar year during which the IMF staff report with
information on such changes is issued. Changes in these measures that
give rise to exchange restrictions or MCPs that affect other categories
of the country tables are reported under the relevant categories in the
AREAER, in accordance with the standard reporting periods.
Exchange measures imposed Exchange measures on payments and transfers in connection with
for security reasons international transactions imposed by member countries for reasons of
national or international security.
In accordance with IMF Security restrictions on current international payments and transfers
Executive Board Decision on the basis of IMF Executive Board Decision No. 144-(52/51), which
No. 144-(52/51) establishes the obligation of members to notify the IMF before imposing
such restrictions, or, if circumstances preclude advance notification, as
promptly as possible.
Other security restrictions Other restrictions imposed for security reasons (e.g., in accordance
with UN or EU regulations) but not notified to the IMF under Board
Decision 144-(52/51).
References to legal instru- Specific references to the underlying legal materials and hyperlinks to the
ments and hyperlinks legal texts. The category is included at the end of each section.
Exchange Arrangement
Currency The official legal tender of the country.
Other legal tender The existence of another currency that is officially allowed to be used in
the country.
Exchange rate structure If there is one exchange rate, the system is called unitary. If there is more
than one exchange rate that may be used simultaneously for different
purposes and/or by different entities, and if these exchange rates give rise
to MCPs or differing rates for current and capital transactions, the system
is called dual or multiple. Different effective exchange rates resulting
from exchange taxes or subsidies, excessive exchange rate spreads between
buying and selling rates, bilateral payments agreements, and broken cross
rates are not included in this category. Changes in measures within this
category are reported in accordance with the standard reporting periods.
Reclassification in cases related to changes in MCPs occurs in the edition
of the AREAER that covers the calendar year during which the IMF staff
report including information on such changes is issued.
Classification Describes and classifies the de jure and the de facto exchange rate
arrangements.
De jure
The description and effective dates of the de jure exchange rate arrange-
ments are provided by the authorities. Under Article IV, Section 2(a),
of the IMF’s Articles of Agreement and Paragraph 16 of the 2007
Surveillance Decision No. 13919-(07/51), each member is required to
notify the IMF of the exchange arrangements it intends to apply and to
notify the IMF promptly of any changes in its exchange arrangements.
Country authorities are also requested to identify, whenever possible,
which of the existing exchange rate arrangement categories listed below
most closely corresponds to the de jure arrangement in effect. Country
authorities may also wish to briefly describe their official exchange rate
policy. The description includes officially announced or estimated param-
eters of the exchange arrangement (e.g., parity, bands, weights, rate of
crawl, and other indicators used to manage the exchange rate). It also
provides information on the computation of the exchange rate.
De facto
The IMF staff classifies the de facto exchange rate arrangements accord-
ing to the categories below. The name and the definition of the categories
describing the de facto exchange rate arrangements have been modified
in accordance with the revised classification methodology, as of February
1, 2009. Wherever the description of the de jure arrangement can be
empirically confirmed by the staff over at least the previous six months,
the exchange rate arrangement is classified in the same way on a de facto
basis. Because the de facto methodology for classification of exchange
rate regimes is based on a backward-looking approach that relies on past
exchange rate movement and historical data, some countries are reclas-
sified retroactively to a date when the behavior of the exchange rate
changed and matched the criteria for reclassification to the appropriate
category. For these countries, if the retroactive date of reclassification
precedes the period covered in this report, the effective date of change to
be entered in the country chapter and the changes section is deemed to
be the first day of the year in which the decision of reclassification took
place.
No separate legal tender Classification as an exchange rate arrangement with no separate legal tender
involves confirmation of the country authorities’ de jure exchange rate
arrangement. The currency of another country circulates as the sole legal
tender (formal dollarization). Adopting such an arrangement implies
complete surrender by the monetary authorities of control over domestic
monetary policy. Exchange arrangements of countries that belong to a
monetary or currency union in which the same legal tender is shared by
the members of the union are classified under the arrangement govern-
ing the joint currency. This classification is based on the behavior of
the common currency, whereas the previous classification was based on
the lack of a separate legal tender. The classification thus reflects only a
definitional change and is not based on a judgment that there has been a
substantive change in the exchange arrangement or other policies of the
currency union or its members.
Currency board Classification as a currency board involves confirmation of the country
authorities’ de jure exchange rate arrangement. A currency board arrange-
ment is a monetary arrangement based on an explicit legislative commit-
ment to exchange domestic currency for a specified foreign currency at a
fixed exchange rate, combined with restrictions on the issuance authority
to ensure the fulfillment of its legal obligation. This implies that domestic
currency is usually fully backed by foreign assets, eliminating traditional
central bank functions such as monetary control and lender of last resort
and leaving little room for discretionary monetary policy. Some flexibility
may still be afforded, depending on the strictness of the banking rules of
the currency board arrangement.
Conventional peg Classification as a conventional peg involves confirmation of the country
authorities’ de jure exchange rate arrangement. For this category the
country formally (de jure) pegs its currency at a fixed rate to another
currency or a basket of currencies, where the basket is formed, for
example, from the currencies of major trading or financial partners and
weights reflect the geographic distribution of trade, services, or capital
flows. The anchor currency or basket weights are public or notified to
the IMF. The country authorities stand ready to maintain the fixed parity
through direct intervention (i.e., via sale or purchase of foreign exchange
in the market) or indirect intervention (e.g., via exchange-rate-related use
of interest rate policy, imposition of foreign exchange regulations, exercise
of moral suasion that constrains foreign exchange activity, or intervention
by other public institutions). There is no commitment to irrevocably keep
the parity, but the formal arrangement must be confirmed empirically:
the exchange rate may fluctuate within narrow margins of less than ±1%
around a central rate or the maximum and minimum values of the spot
market exchange rate must remain within a narrow margin of 2% for at
least six months.
Stabilized arrangement Classification as a stabilized arrangement entails a spot market exchange
rate that remains within a margin of 2% for six months or more (with the
exception of a specified number of outliers or step adjustments) and is not
floating. The required margin of stability can be met either with respect
to a single currency or a basket of currencies, where the anchor currency
or the basket is ascertained or confirmed using statistical techniques.
Classification as a stabilized arrangement requires that the statistical crite-
ria are met and that the exchange rate remains stable as a result of official
action (including structural market rigidities). The classification does not
imply a policy commitment on the part of the country authorities.
Free floating A floating exchange rate can be classified as free floating if intervention
occurs only exceptionally and aims to address disorderly market condi-
tions and if the authorities have provided information or data confirm-
ing that intervention has been limited to at most three instances in the
previous six months, each lasting no more than three business days. If
the information or data required are not available to the IMF staff, the
arrangement is classified as floating. Detailed data on intervention or
official foreign exchange transactions will not be requested routinely of
member countries, but only when other information available to the
IMF staff is not sufficient to resolve uncertainties about the appropriate
classification.
Official exchange rate Provides information on the computation of the exchange rate and the
use of the official exchange rate (accounting, customs valuation purposes,
foreign exchange transactions with the government).
Monetary policy framework The category includes a brief description of the monetary policy frame-
work in effect according to the following subcategories:
Exchange rate anchor The monetary authority buys or sell foreign exchange to maintain the
exchange rate at its predetermined level or within a range. The exchange
rate thus serves as the nominal anchor or intermediate target of monetary
policy. These frameworks are associated with exchange rate arrangements
with no separate legal tender, currency board arrangements, pegs (or stabi-
lized arrangements) with or without bands, crawling pegs (or crawl-like
arrangements), and other managed arrangements.
Monetary aggregate target The monetary authority uses its instruments to achieve a target growth
rate for a monetary aggregate, such as reserve money, M1, or M2, and the
targeted aggregate becomes the nominal anchor or intermediate target of
monetary policy.
Inflation-targeting framework This involves the public announcement of numerical targets for infla-
tion, with an institutional commitment by the monetary authority to
achieve these targets, typically over a medium-term horizon. Additional
key features normally include increased communication with the public
and the markets about the plans and objectives of monetary policymakers
and increased accountability of the central bank for achieving its inflation
objectives. Monetary policy decisions are often guided by the deviation of
forecasts of future inflation from the announced inflation target, with the
inflation forecast acting (implicitly or explicitly) as the intermediate target
of monetary policy.
Other monetary framework The country has no explicitly stated nominal anchor, but rather monitors
various indicators in conducting monetary policy. This category is also
used when no relevant information on the country is available.
Exchange tax Foreign exchange transactions are subject to a special tax. Bank commis-
sions charged on foreign exchange transactions are not included in
this category; rather, they are listed under the exchange arrangement
classification.
Exchange subsidy Foreign exchange transactions are subsidized by using separate, nonmar-
ket exchange rates.
Foreign exchange market The existence of a foreign exchange market.
Spot exchange market Institutional setting of the foreign exchange market for spot transactions
and market participants. Existence and significance of the parallel market.
Operated by the The role of the central bank in providing access to foreign exchange to
central bank market participants through a foreign exchange standing facility, alloca-
tion of foreign exchange to authorized dealers or other legal and private
persons, the management of buy or sell auctions or fixing sessions, and
the price determination and frequency of central bank operations.
A foreign exchange standing facility allows market participants to buy
foreign exchange from or sell it to the central bank at predetermined
exchange rates at their own initiative and is usually instrumental in main-
taining a hard or soft peg arrangement. The credibility of the facility
depends to a large extent on the availability of foreign exchange reserves
to back the facility.
Allocation involves redistribution of foreign exchange inflows by the
central bank to market participants for specific international transac-
tions or in specific amounts (rationing). Foreign exchange allocation is
often used to provide foreign exchange for strategic imports such as oil or
food when foreign exchange reserves are scarce. In an allocation system,
companies and individuals often transact directly with the central bank,
and commercial banks may buy foreign exchange only for their clients’
underlying international transactions. Purchases of foreign exchange for
banks’ own books typically are not permitted.
Auctions are organized by the central bank, usually for market partici-
pants to buy and/or sell foreign exchange. Auctions can take the form of
multiple-price auctions (all successful bidders pay the price they offer) or
single-price auctions (all successful bidders pay the same price, which is
the market-clearing/cut-off price). The authorities may exercise discre-
tion in accepting or rejecting offers, and sometimes a floor price is deter-
mined in advance, below which offers are not accepted. The frequency
of auctions depends mainly on the amount or availability of foreign
exchange to be auctioned and on the role the auction plays in the foreign
exchange market.
Fixing sessions are often organized by the central bank at the early stage
of market development to establish a market-clearing exchange rate. The
central bank monitors the market closely and often actively participates
in price formation by selling or buying during the session to achieve a
certain exchange rate target. The price determined at the fixing session is
often used for foreign exchange transactions outside the session and/or for
accounting and valuation purposes.
Interbank market The organization and operation of the interbank market; interven-
tions. The existence of brokerage, over-the-counter, and market-making
arrangements.
Forward exchange market The existence of a forward exchange market and the institutional arrange-
ment and market participants.
Official cover of forward An official entity (the central bank or the government) assumes the
operations exchange risk of certain foreign exchange transactions.
Resident Accounts
Indicates whether resident accounts that are maintained in the national
currency or in foreign currency, locally or abroad, are allowed and
describes how they are treated and the facilities and limitations attached
to such accounts. When there is more than one type of resident account,
the nature and operation of the various types of accounts are also
described—for example, whether residents are allowed to open foreign
exchange accounts with or without approval from the exchange control
authority, whether these accounts may be held domestically or abroad,
and whether the balances on accounts held by residents in domestic
currency may be converted into foreign currency.
Nonresident Accounts
Indicates whether local nonresident accounts maintained in the national
currency or in foreign currency are allowed and describes how they are
treated and the facilities and limitations attached to such accounts. When
there is more than one type of nonresident account, the nature and opera-
tion of the various types of accounts are also described.
Blocked accounts Accounts of nonresidents, usually in domestic currency. Regulations
prohibit or limit the conversion and/or transfer of the balances of such
accounts.
Open general licenses Indicates arrangements whereby certain imports or other international
transactions are exempt from the restrictive application of licensing
requirements.
Licenses with quotas Refers to situations in which a license for the importation of a certain
good is granted but a specific limit is imposed on the amount to be
imported.
Other nontariff measures May include prohibitions on imports of certain goods from all countries
or of all goods from a certain country. Several other nontariff measures are
used by countries (e.g., phytosanitary examinations, setting of standards),
but these are not covered fully in the report.
Import taxes and/or tariffs A brief description of the import tax and tariff system, including taxes
levied on the foreign exchange made available for imports.
Taxes collected through the Indicates if any taxes apply to the exchange side of an import transaction.
exchange system
State import monopoly Private parties are not allowed to engage in the importation of certain
products, or they are limited in their activity.
Capital Transactions
Describes regulations influencing both inward and outward capital flows.
The concept of controls on capital transactions is interpreted broadly.
Thus, controls on capital transactions include prohibitions; need for prior
approval, authorization, and notification; dual and multiple exchange
rates; discriminatory taxes; and reserve requirements or interest penalties
imposed by the authorities that regulate the conclusion or execution of
transactions or transfers and the holding of assets at home by nonresi-
dents and abroad by residents. The coverage of the regulations applies to
receipts as well as to payments and to actions initiated by nonresidents
and residents. In addition, because of the close association with capital
transactions, information is also provided on local financial operations
conducted in foreign currency, describing specific regulations in effect
that limit residents’ and nonresidents’ issuance of securities denominated
in foreign currency or, generally, limitations on contract agreements
expressed in foreign exchange.
Repatriation requirements The definitions of repatriation and surrender requirements are similar to
those applied to export proceeds.
Surrender requirements
Surrender to the central bank
Surrender to authorized
dealers
Controls on capital and Refers to public offerings or private placements on primary markets or
money market instruments their listing on secondary markets.
On capital market securities Refers to shares and other securities of a participating nature and bonds
and other securities with an original maturity of more than one year.
Shares or other securities of a Includes transactions involving shares and other securities of a participat-
participating nature ing nature if they are not effected for the purpose of acquiring a last-
ing economic interest in the management of the enterprise concerned.
Investment for the purpose of acquiring a lasting economic interest is
addressed under foreign direct investment.
Bonds or other debt securities Refers to bonds and other securities with an original maturity of more
than one year. The term “other debt securities” includes notes and
debentures.
On money market Refers to securities with an original maturity of one year or less and
instruments includes short-term instruments, such as certificates of deposit and bills of
exchange. The category also includes treasury bills and other short-term
government paper, bankers’ acceptances, commercial paper, interbank
deposits, and repurchase agreements.
On collective investment Includes share certificates and registry entries or other evidence of investor
securities interest in an institution for collective investment, such as mutual funds,
and unit and investment trusts.
Controls on derivatives and Refers to operations in other negotiable instruments and nonsecured
other instruments claims not covered under the above subsections. These may include opera-
tions in rights; warrants; financial options and futures; secondary market
operations in other financial claims (including sovereign loans, mortgage
loans, commercial credits, negotiable instruments originating as loans,
receivables, and discounted bills of trade); forward operations (including
those in foreign exchange); swaps of bonds and other debt securities; cred-
its and loans; and other swaps (e.g., interest rate, debt/equity, equity/debt,
foreign currency, and swaps of any of the instruments listed above). Also
included are controls on operations in foreign exchange without any other
underlying transaction (spot or forward trading on the foreign exchange
markets, forward cover operations, etc.).
Controls on credit
operations
Commercial credits Covers operations directly linked with international trade transactions or
with the rendering of international services.
Financial credits Includes credits other than commercial credits granted by all residents,
including banks, to nonresidents, or vice versa.
Guarantees, sureties, and Includes guarantees, sureties, and financial backup facilities provided by
financial backup facilities residents to nonresidents and vice versa. It also includes securities pledged
for payment or performance of a contract—such as warrants, perfor-
mance bonds, and standby letters of credit—and financial backup facili-
ties that are credit facilities used as a guarantee for independent financial
operations.
Controls on direct Refers to investments for the purpose of establishing lasting economic
investment relations both abroad by residents and domestically by nonresidents.
These investments are essentially for the purpose of producing goods
and services, and, in particular, in order to allow investor participation
in the management of an enterprise. The category includes the creation
or extension of a wholly owned enterprise, subsidiary, or branch and the
acquisition of full or partial ownership of a new or existing enterprise that
results in effective influence over the operations of the enterprise.
Controls on liquidation of Refers to the transfer of principal, including the initial capital and capital
direct investment gains, of a foreign direct investment as defined above.
Controls on real estate Refers to the acquisition of real estate not associated with direct invest-
transactions ment, including, for example, investments of a purely financial nature in
real estate or the acquisition of real estate for personal use.
Controls on personal capi- Covers transfers initiated on behalf of private persons and intended to
tal transactions benefit other private persons. It includes transactions involving property
to which the promise of a return to the owner with payments of interest
is attached (e.g., loans or settlements of debt in their country of origin by
immigrants) and transfers effected free of charge to the beneficiary (e.g.,
gifts and endowments, loans, inheritances and legacies, and emigrants’
assets).
The Bahamas
Afghanistan
Bangladesh
Azerbaijan
Argentina
Barbados
Australia
Armenia
Belgium
Bahrain
Albania
Bhutan
Belarus
Austria
Angola
Algeria
Bolivia
Benin
Belize
Status under IMF Articles of Agreement
Article VIII 168 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV 19 ● ● ● ●
Exchange Rate Arrangements
No separate legal tender 13
Currency board 11 ◊
Conventional peg 41 ◊ ◊ ◊ ◊ ▲ Ì
Stabilized arrangement 16 ◊ ◊
Crawling peg 3 ◊
Crawl-like arrangement 12 ◊
Pegged exchange rate within
horizontal bands 1
Other managed arrangement 24 * ● ●
Floating 35 ● ● ●
Free floating 31 ● ⊕ ⊕
Exchange rate structure
Dual exchange rates 15 ● ●
Multiple exchange rates 7 ●
Arrangements for Payments
and Receipts
Bilateral payments arrangements 67 ● ● ● ● ● ● ● ● ● ● ● ● ●
Payments arrears 32 ● ● ●
Controls on payments for invisible
transactions and current transfers 95 ● ● ● ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements 87 ● ● ● – ● ● ● ● ● ● ● ● ●
Surrender requirements 57 ● ● ● ● ● ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities 147 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments 124 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities 123 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Derivatives and other instruments 98 ● ● ■ ● ● ● ● ● ● ● ● ● ● ● ● ●
Commercial credits 83 ● ● ● ● ● ● ● ● ●
Financial credits 112 ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities 77 ● ● ● ● ● ● ● ● ● ●
Direct investment 150 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment 46 ● ● ● ● ● ● ●
Real estate transactions 145 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions 94 ● ● – ● ● ● ● ● ● ● ● ● ●
Provisions specific to:
Commercial banks and other credit
institutions 168 ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Institutional investors 141 ● ● ■ – ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Brunei Darussalam
Republic of Congo
Côte d’Ivoire
Burkina Faso
Cape Verde
Costa Rica
Cameroon
Cambodia
Colombia
Botswana
Comoros
Burundi
Bulgaria
Canada
Croatia
China
Brazil
Chad
Chile
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● ●
Exchange Rate Arrangements
No separate legal tender
Currency board ▲ Ì ▲
Conventional peg ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲
Stabilized arrangement ◊
Crawling peg *
Crawl-like arrangement ◊ ▲
Pegged exchange rate within
horizontal bands
Other managed arrangement ● ● ●
Floating ● ●
Free floating ● ●
Exchange rate structure
Dual exchange rates ●
Multiple exchange rates
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ● ● ● ● ●
Payments arrears – ● ● ● ● ●
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Surrender requirements ● ● ● ● ● ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● – ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments ● ● ● ● – ● ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities ● ● ● ● – ● ● ● ● ● ● ● ● ● ● ●
Derivatives and other instruments ● ● ● ■ ■ ■ ■ ● ● ● ● ● ■ ● ●
Commercial credits ● ● ● ● ● ● ● ● ● ● ● ●
Financial credits ● ● ● ● ● ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities ● ● ■ ● ■ ■ ● ● ● ● ■ ●
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● ● ● ● ● ● ● ● ●
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ● ● ● ● ● ● ● ● ● ● ● ●
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Institutional investors ● ● ● ● ● ● ● ● ● – ● ● ● ● ● – ● ● ● ●
Dominican Republic
Equatorial Guinea
Czech Republic
The Gambia
El Salvador
Dominica
Denmark
Germany
Djibouti
Ethiopia
Ecuador
Georgia
Finland
Estonia
Cyprus
Gabon
Greece
Eritrea
Ghana
France
Egypt
Fiji
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● ●
Exchange Rate Arrangements
No separate legal tender ◊ ◊
Currency board ◊ ◊
Conventional peg v ▲ ◊ * ▲
Stabilized arrangement *
Crawling peg
Crawl-like arrangement ◊ ◊
Pegged exchange rate within
horizontal bands
Other managed arrangement
Floating ● ● ●
Free floating ⊕ ● ⊕ ⊕ ⊕ ⊕ ⊕
Exchange rate structure
Dual exchange rates ● ●
Multiple exchange rates
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ●
Payments arrears ● ● ● ● ●
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ●
Surrender requirements ● ● ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities ● ● ● ● ● ● ● – ● ● ● ● ● ● ●
Derivatives and other instruments ● – ● ● ■ – ● ● ■ ● ● ●
Commercial credits ● ● ● ● ● ● ● ●
Financial credits ● ● ● ● ● ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities ● ● ● ● ■ – ● ● ■
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● ● ● ●
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ● ● ● ● ● ●
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Institutional investors ● ● ● ● ● ● ● ● ● ● – ● ● ● ● ● ● ● ● ● ●
Kazakhstan
Guatemala
Honduras
Indonesia
Hungary
Grenada
Guyana
Kiribati
Jamaica
Guinea
Iceland
Ireland
Jordan
Kenya
Japan
Haiti
India
Israel
Italy
Iraq
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ●
Exchange Rate Arrangements
No separate legal tender Ì
Currency board ◊
Conventional peg ▲ ◊
Stabilized arrangement ◊ ◊ ◊
Crawling peg
Crawl-like arrangement ◊ ◊ ◊ ◊
Pegged exchange rate within
horizontal bands
Other managed arrangement ● *
Floating ● ● ● ● ● ●
Free floating ⊕ ⊕ ●
Exchange rate structure
Dual exchange rates ●
Multiple exchange rates
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ● ● ●
Payments arrears ● ● ● ● ●
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ● ■
Surrender requirements ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Derivatives and other instruments ● ● ● ● ● ● – ● ● ● ● ● ●
Commercial credits ● ● ● ● ● ● ● ● ● ● ●
Financial credits ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities ● ● ● ● ● ● ● ● ● ● ●
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● ● ● ● ● ● ■
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ● ● ● ● ● ● ● ■
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ■
Institutional investors ● – ● – ● ● ● ● ● – ● ● ● ● ● ● ● –
Kyrgyz Republic
FYR Macedonia
Marshall Islands
Luxembourg
Madagascar
Mauritania
Lao P.D.R.
Mauritius
Lithuania
Maldives
Lebanon
Malaysia
Lesotho
Malawi
Kosovo
Kuwait
Liberia
Latvia
Korea
Malta
Libya
Mali
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● ● ●
Exchange Rate Arrangements
No separate legal tender ▲ ◊
Currency board v
Conventional peg * v Ì ○ ▲
Stabilized arrangement ◊ ◊ ▲ ◊
Crawling peg
Crawl-like arrangement
Pegged exchange rate within
horizontal bands
Other managed arrangement ● ◊ ● ● ●
Floating ● ● ●
Free floating ⊕ ⊕
Exchange rate structure
Dual exchange rates ● ● ●
Multiple exchange rates
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ● ● ●
Payments arrears ● – ● ●
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ● ●
Surrender requirements ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● – ● ●
Money market instruments ● ● ● ● ● ● ● ● ● ● ● ● ● – ● ●
Collective investment securities ● ● ● ● ● ● ● ● ● ● ● ● ● – ■ ●
Derivatives and other instruments ● ■ ● ● ■ ■ ● ● ● ● ● ● ■ ● – ■
Commercial credits ● ● ● ● ● ● ● ● ● –
Financial credits ● ● ● ● ● ● ● ● ● ● ● – ●
Guarantees, sureties, and financial
backup facilities ● ● ● ● ● ● ● – ●
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● ● –
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ● ● ● ● ● ● ● ● ● – ●
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● – ● ●
Institutional investors ● ● ● – ● ● ● ● ● ● ● – ● – ● ● ● – ●
Netherlands
Micronesia
Nicaragua
Myanmar
Mongolia
Morocco
Paraguay
Moldova
Namibia
Pakistan
Norway
Panama
Mexico
Nigeria
Oman
Nepal
Niger
Palau
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● ●
Exchange Rate Arrangements
No separate legal tender ◊ ▲ ◊ ◊
Currency board
Conventional peg * Ì Ì ▲ ◊
Stabilized arrangement
Crawling peg ◊
Crawl-like arrangement
Pegged exchange rate within
horizontal bands
Other managed arrangement ● ● ●
Floating ● ● ● ● ●
Free floating ● ⊕ ● ●
Exchange rate structure
Dual exchange rates ●
Multiple exchange rates ● ●
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ●
Payments arrears ● ● ●
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ● ●
Surrender requirements ● ● ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments ● ■ ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities ● ● ● ● ● ● ● ● ●
Derivatives and other instruments ● ● – ● ● ● ● ● ● ● ● ●
Commercial credits ■ ● ● ● ● ● ● ● ● ● ●
Financial credits ● ■ ● ● ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities ● ■ ● ● ● ● ● ● ● ● ● ●
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● ● ● ● ● ●
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ■ ● ● ● ● ● ● ● ● ● ● ● ●
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Institutional investors ● – ● – ● ● ● – ● ● ● ● ● – ● – ● ● ● ●
Solomon Islands
Slovak Republic
Saudi Arabia
South Africa
Sierra Leone
San Marino
Philippines
Seychelles
Singapore
Romania
Portugal
Slovenia
Rwanda
Somalia
Senegal
Poland
Samoa
Russia
Serbia
Qatar
Peru
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● ●
Exchange Rate Arrangements
No separate legal tender ▲
Currency board
Conventional peg ◊ * ▲ ◊ ▲
Stabilized arrangement
Crawling peg
Crawl-like arrangement ◊
Pegged exchange rate within
horizontal bands
Other managed arrangement ● * ●
Floating ● ● ● ● ● ● ●
Free floating ● ⊕ ⊕ ⊕ ●
Exchange rate structure
Dual exchange rates ●
Multiple exchange rates ● ●
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ● ● ● ● ● –
Payments arrears ● ● ● ● –
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ● ● ●
Surrender requirements ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments ● ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities ● ● ● ● ● ● ● ● ● ● ● ● ● – ●
Derivatives and other instruments ● ● ● ● ● ● ● ● ■ ● ● – ●
Commercial credits ● ● ● – ● ● ●
Financial credits ● ● ● – ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities ● – ● ● ● ● ● ●
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● ● ●
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ● ● ● ● ● ● ● ● ● – ●
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● – ●
Institutional investors ● ● ● ● ● ● – ● ● ● – ● ● ● – ● ● ● ● – ●
Turkmenistan
The Bahamas
Timor-Leste
Switzerland
Swaziland
Tajikistan
Sri Lanka
Suriname
Tanzania
Thailand
St. Lucia
Sweden
Tunisia
Turkey
Sudan
Tonga
Spain
Togo
Syria
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● ●
Exchange Rate Arrangements
No separate legal tender ◊
Currency board ◊ ◊ ◊
Conventional peg Ì ◊ ▲ ◊
Stabilized arrangement ◊ ◊ ◊
Crawling peg
Crawl-like arrangement *
Pegged exchange rate within
horizontal bands *
Other managed arrangement ● ● *
Floating ● ● ● ●
Free floating ⊕ ●
Exchange rate structure
Dual exchange rates ● ● ●
Multiple exchange rates ●
Arrangements for Payments
and Receipts
Bilateral payments arrangements ● ● ● ● ●
Payments arrears ● ●
Controls on payments for invisible
transactions and current transfers ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Proceeds from exports and/or invisible
transactions
Repatriation requirements ● ● ● ● ● ● ● ● ● ● ● ● ●
Surrender requirements ● ● ● ● ● ● ●
Capital Transactions
Controls on:
Capital market securities ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Money market instruments ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Collective investment securities ● ● ● ● ● ■ ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Derivatives and other instruments ● ● ■ ● ■ ● ● ● ● ● ● ● ● ● ● ● ● ● –
Commercial credits ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Financial credits ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Guarantees, sureties, and financial
backup facilities ● ● ● ● ● ● ● ● ● ● ● ● ●
Direct investment ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Liquidation of direct investment ● – ● ● ● ●
Real estate transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Personal capital transactions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● –
Provisions specific to:
Commercial banks and other credit
institutions ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Institutional investors ● ● ● ● ● ● ● ● ● ● – ● ● ● – ● – ● ● ● ●
United Kingdom
Uzbekistan
Zimbabwe
Venezuela
Uruguay
Vietnam
Vanuatu
Ukraine
Uganda
Zambia
Tuvalu
Yemen
Aruba
Status under IMF Articles of Agreement
Article VIII ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Article XIV ● Key
Exchange Rate Arrangements Indicates that
the specified
No separate legal tender Ì ◊ practice is
●
Currency board ◊ a feature of
the exchange
Conventional peg ◊ ◊ ◊ ◊ system.
Stabilized arrangement ◊ ◊ Indicates that
Crawling peg data were not
– available at
Crawl-like arrangement ◊ the time of
Pegged exchange rate within publication.
horizontal bands Indicates that
Other managed arrangement * ● the specified
■
practice is not
Floating ● ● ●
regulated.
Free floating ● ●
Indicates that
Exchange rate structure the country
Dual exchange rates ● ● ⊕
participates in
Multiple exchange rates ● the euro area.
Arrangements for Payments Indicates that
and Receipts the country
Bilateral payments arrangements – ● ● ● ● ■ ● ● ● participates in
v the European
Payments arrears – ● ■ ● ●
Exchange Rate
Controls on payments for invisible Mechanism
transactions and current transfers – ● ● ■ ● ■ ● ● (ERM II).
Proceeds from exports and/or invisible
Indicates that
transactions
● ● ■ ● ● ● ● flexibility is
Repatriation requirements –
◊ limited vis-à-
Surrender requirements – ● ● ■ ● ● vis the U.S.
Capital Transactions dollar.
Controls on: Indicates that
Capital market securities – ● ● ● ● ■ ● ● ● ● ●
flexibility is
▲
Money market instruments – ● ● ● ■ ● ● ● ● ● limited vis-à-
vis the euro.
Collective investment securities – ● ● ● ● ■ ● ● ● ● ●
Indicates that
Derivatives and other instruments – ● ● ■ ■ ● ● ● ● ● ● flexibility
Commercial credits – ● ● ■ ● ● ● ● ● is limited
Ì
vis-à-vis
Financial credits – ● ● ■ ● ● ● ● ● ● another single
Guarantees, sureties, and financial currency.
backup facilities – ● ● ● ■ ● ● ● ● ●
Indicates that
Direct investment – ● ● ● ● ● ■ ● ● ● ● ● ● flexibility is
○
● ● ■ ● ● ● ● limited vis-à-
Liquidation of direct investment –
vis the SDR.
Real estate transactions – ● ● ● ● ● ■ ● ● ●
Indicates that
Personal capital transactions – ● ● ■ ● ● ● ● ● flexibility is
limited vis-
Provisions specific to:
Commercial banks and other credit
* à-vis another
institutions – ● ● ● ● ● ● ■ ● ● ● ● ● ● ● ● basket of
currencies.
Institutional investors – ● – ● ● ● ● ■ ● ● ● ● ● ● ●
Exchange Measures
Exchange Arrangement
Currency
Other legal tender
Exchange rate structure
Unitary
Dual
Multiple
Classification
No separate legal tender
Currency board
Conventional peg
Stabilized arrangement
Crawling peg
Crawl-like arrangement
Pegged exchange rate within horizontal bands
Other managed arrangement
Floating
Free floating
Official exchange rate
Monetary policy framework
Exchange rate anchor
Monetary aggregate target
Inflation-targeting framework
Resident Accounts
Nonresident Accounts
Repatriation requirements
Surrender requirements
Surrender to the central bank
Surrender to authorized dealers
Financing requirements
Documentation requirements
Letters of credit
Guarantees
Domiciliation
Preshipment inspection
Other
Export licenses
Without quotas
With quotas
Export taxes
Collected through the exchange system
Repatriation requirements
Surrender requirements
Surrender to the central bank
Surrender to authorized dealers
Restrictions on use of funds
References to legal instruments and hyperlinks
Capital Transactions