Policy Papers

Review Of The Fund’s Policy On Multiple Currency Practices: Initial Considerations

June 10, 2019

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Format: Chicago

International Monetary Fund. Legal Dept., International Monetary Fund. Monetary and Capital Markets Department, International Monetary Fund. Strategy, Policy, &, Review Department, and International Monetary Fund. Research Dept. "Review Of The Fund’s Policy On Multiple Currency Practices: Initial Considerations", Policy Papers 2019, 015 (2019), accessed November 21, 2024, https://0-doi-org.library.svsu.edu/10.5089/9781498318860.007

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Summary

This paper reviews the Fund’s policy on multiple currency practices (MCPs). There remain strong economic and legal reasons to retain a policy on MCPs. The over-arching aim of the review is to make the policy and its application more effective. Based on this review, the paper proposes initial considerations for reforming features of the policy that have created challenges. • Clarifying the concept of “official action” to focus on measures that segment FX markets. • Eliminating potentiality. • Updating the threshold for permissible FX spreads. • Adjusting approval policies. • Reviewing links with capital transactions. • Considering merits of a remedial framework.

Subject: Currencies, Exchange rates, Exchange restrictions, Foreign exchange, Money, Multiple currency practices

Keywords: Article, Central Africa, Currencies, East Africa, Exchange rates, Exchange restriction, Exchange restrictions, Exchange transaction, Fund member, Global, IMF's transparency policy, Market, MCP Policy, Middle East, Multiple currency practices, PP, The Fund, Transaction, Transaction vis-à-vis

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