Amending the Fund’s charter; reform or patchwork?

Abstract

Since the change in the exchange rate regime came about as a result of breakdown and not reform, there are no rules on how to operate the new flexible exchange rate regime and no common philosophy on which to base them. For this reason, the recent agreement reached in Jamaica and now embodied in an amendment to the Articles of Agreement of the International Monetary Fund, is all the more important. The present article analyses and evaluates the package of agreements, and especially their significance for international monetary relations during the next few years. Accordingly, each of the main points of the agreements reached is described. The author argues that the Jamaica agreement provides an important starting point for further progress in the field of exchange rates.

JEL: E42, F33