CONVERTIBLE CURRENCY

Press, Volume XCI, Issue 27690, 21 June 1955, Page 13

CONVERTIBLE CURRENCY

Progress Made Last Year

(Rec. 8 p.m.) WASHINGTON, June 19. The International Monetary Fund today reported further progress had been made towards convertibility of currencies, but said that the use of restrictive devices was still widespread. In its sixth annual report covering the period from May, 1954, to April, 1955, the fund said that last year’s progress had been more gradual, and mainly by means of numerous relatively small measures of relaxation. The report expected that the movement towards convertibility would continue during the next 12 months. In that time the fund would carry out the fourth series of consultations with member nations to strengthen international collaboration on exchange matters.

In these consultations, emphasis would be placed on assisting countries which still had balance of payments difficulties to establish a basis for the further relaxation of restrictions and the reduction of discrimination. Emphasis would also be given to trying to ensure that restrictions, no longer necessary for balance of payments reasons, were removed or that the steps necessary to achieve their removal are undertaken, the report said. , It noted that various countries, particularly some major creditor nations, were continuing protectionist restrictions which hampered others in achieving a strong balance of payments position. The report said the last year had been marked by bigger exchange allocations and a significant lessening of discrimination against dollar payments, with exchange controls simplified or •administratively liberalised in a number of countries. British Policy Welcomed It welcomed the action of Britain inreducing reliance on restrictions and control and placing increased reliance on market mechanism. Expressing concern over the prevalence of bilateral foreign trade relationships, the report said that such arrangements set up barriers to multilateral trade and payments and consequently interfered with an economic allocation of resources. “When, as at present, countries are seriously considering further steps towards multilateralism and convertibility. they are understandably fearful that they may Jose export business if other countries insist on continuing to trade on the basis of bilateral agreements,” it said.

In the forthcoming consultations... the fund will place special emphasis on bilaterialism because of its signicance for further progress toward convertibility and the removal of restrictions,” the report said.