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Appendix: Selections from the Articles of Agreement of the International Monetary Fund

Published online by Cambridge University Press:  05 November 2012

John Maynard Keynes
Edited by
Elizabeth Johnson  and
Donald Moggridge
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Summary

ARTICLE IV. PAR VALUES OF CURRENCIES

Sec. 3. Foreign exchange dealings based on parity. The maximum and the minimum rates for exchange transactions between the currencies of members taking place within their territories shall not differ from parity

  1. (i) in the case of spot exchange transactions, by more than one percent; and

  2. (ii) in the case of other exchange transactions, by a margin which exceeds the margin for spot exchange transactions by more than the Fund considers reasonable.

Sec. 4. Obligations regarding exchange stability, (a) Each member undertakes to collaborate with the Fund to promote exchange stability, to maintain orderly exchange arrangements with other members, and to avoid competitive exchange alterations.

(b) Each member undertakes, through appropriate measures consistent with this Agreement, to permit within its territories exchange transactions between its currency and the currencies of other members only within the limits prescribed under Section 3 of this Article. A member whose monetary authorities, for the settlement of international transactions, in fact freely buy and sell gold within the limits prescribed by the Fund under Section 2 of this Article shall be deemed to be fulfilling this undertaking.

Sec. 5. Changes in par values, (a) A member shall not propose a change in the par value of its currency except to correct a fundamental disequilibrium.

(b) A change in the par value of a member's currency may be made only on the proposal of the member and only after consultation with the Fund.

Type
Chapter
Information
The Collected Writings of John Maynard Keynes , pp. 402 - 410
Publisher: Royal Economic Society
Print publication year: 1978

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