A.—B

ARTICLE XVIII—INTERPRETATION (a) Any question of .interpretation of the provisions of this Agreement arising between any member and the Fund or between any members of the Fund shall be submitted to the Executive Directors for their decision. If the question particularly affects any member not entitled to appoint an executive director, it shall be entitled to representation in accordance with Article XII, Section 3 (j). (b) In any case where the Executive Directors have given a decision under (a) above, any member may require that the question be referred to the Board of Governors, whose decision shall be final. Pending the result of the reference to the Board, the Fund may, so far as it deems necessary, act on the basis of the decision of the Executive Directors. (c) Whenever a disagreement arises between the Fund and a member which has withdrawn, or between the Fund and any member during liquidation of the Fund, such disagreement shall be submitted to arbitration by a tribunal of three arbitrators, one appointed by the Fund, another by the member or withdrawing member, and an umpire who, unless the parties otherwise agree, shall be appointed by the President of the Permanent Court of International Justice or such other authority as may have been prescribed by regulation adopted by the Fund. The umpire shall have full power to settle all questions of procedure in any case where the parties are in disagreement will) respect thereto. ARTICLE XIX.—EXPLANATION OF TERMS In interpreting the provisions of this Agreement the Fund and its members shall be guided by the following :— (a) A member's monetary reserves means its net official holdings of gold, of convertible currencies of other members, and of the currencies of such non-members as the Fund may specify: (b) The official holdings of a member means central holdings—that is, the holdings of its Treasury, central bank, stabilization fund, or similar fiscal agency: (c) The holdings of other official institutions or other banks within its territories may, in any particular case, be deemed by the Fund, after consultation with the member, to be official holdings to the extent that they are substantially in excess of working balances: Provided that for the purpose of determining whether, in a particular case, holdings are in excess of working balances, there shall be deducted from such holdings amounts of currency due to official institutions and banks in the territories of members or non-members specified under (d) below: (d) A member's holdings of convertible currencies means its holdings of the currencies of other members which are not availing themselves ol! the transitional arrangements under Article XIV, Section 2, together with its holdings of the currencies of such non-members as the Fund may from time to time specify. The term " currency " for this purpose includes, without limitation, coins, paper money, bank balances, bank acceptances, and Government obligations issued with a maturity not exceeding twelve months. (e) A member's monetary reserves shall be calculated by deducting from its central holdings the currency liabilities to the Treasuries, central banks, stabilization funds, or similar fiscal agencies of other members or nonmembers specified under (d) above, together with similar liabilities to other official institutions and other banks in the territories of members, or non-members specified under (d) above. To these net holdings shall be added the sums deemed to be official holdings of other official institutions and other banks under (c) above: (/) The Fund's holdings of the currency of a member shall include any securities accepted by the Fund under Article 111, Section 5: (g) The Fund, after consultation with a member which is availing itself of the transitional arrangements under Article XIV, Section 2, may deem holdings of the currency of that member which carry specified rights of conversion into another currency or into gold to be holdings of convertible currency for the purpose of the calculation of monetary reserves : (h) For the purpose of calculating gold subscriptions under Article 111, Section 3, a member's net official holdings of gold and United States dollars shall consist of its official holdings of gold and United States currency after deducting central holdings of its currency by other countries and holdings of its currency by other official institutions and other banks if these holdings carry specified rights of conversion into gold or United States currency. (?") Payments for current transactions means payments which are not for the purpose of transferring capital, and includes, without limitations:— (1) All payments due in connection with foreign trade, other current business, including services, and normal short-term banking and credit facilities; (2) Payments due as interest on loans and as net income from other investments; (3) Payments of moderate amount for amortization of loans or for depreciation of direct investments; (4) Moderate remittances for family living expenses.

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