PAR VALUES AND EXCHANGE POLICIES In agreement with the Fund, the Government of Thailand established an initial par value of 20.8 Thai baht for the U.S. dollar, and the Government of Ethiopia established a new par value of 2.5 Ethiopian dollars per U.S. dollar. The Fund during the period under review also agreed to changes in the foreign exchange system of the Republic of the Congo (Léopoldville). The revised system provides for a buying rate of CF 150 and a selling rate of CF 180 per U.S. dollar. The proceeds of exchange transactions will be surrendered at the buying rate, and exchange payments will be made at the selling rate. The difference between the two rates is designed to provide the Congolese Government with an additional source of income for budgetary purposes. Currency sales FUND CURRENCY TRANSACTIONS The Fund for some time has encouraged drawings in nondollar currencies and repayments to the Fund in U.S. dollars. This policy has had the effect of providing assistance in financing the U.S. balance-ofpayments deficit. During July-December 1963, Fund currency sales (members' drawings) to 13 nonindustrial member countries totaled the equivalent of $145 million, about 80 percent of which were in currencies other than U.S. dollars (see table 1)." This compares with sales equivalent to $188 million in the preceding 6-month period, with approximately 14 percent in nondollar currencies. Drawings by 8 Latin American countries totaled $66.5 million. Among the remaining transactions, Yugoslavia drew the equivalent of $30 million in support of its efforts to maintain internal stability and to strengthen its external payments position; and the United Arab Republic drew the equivalent of $16 million under the Fund's recently announced policy on the compensatory financing of export fluctuations.78 As shown in table 2, there was a continuation of the trend, interrupted only temporarily in the first half of 1963, in the use of currencies other than U.S. dollars in drawings from the Fund. Through December 31, 1963, the equivalent of $7.1 billion was drawn, with approximately $2.8 billion, or 39 percent, in 13 nondollar currencies. Of total drawings of $917 million from the Fund since the end of 1961, $614 million has been drawn in nondollar currencies. Currency repurchases As shown in table 3,79 repurchases by 12 member countries totaled the equivalent of $127 million during the 6-month period under review-an amount appreciably less than the $172 million in the first half of 1963. "Not reprinted here. TABLE 4.—International Monetary Fund currency_repurchases, in currencies and gold, by calendar years, through Dec. 31, 1963 1 Consists of Belgian francs, Canadian dollars, Deutsche mark, French francs, Italian lire, Netherlands guilders, pounds sterling, and Swedish kronor. * Canadian dollars amounting to less than $50,000. NOTE.-Detail will not necessarily add to totals due to rounding. The largest transaction was a repurchase of approximately $80 million in gold, U.S. dollars and other currencies by Canada in partial repayment of that country's drawing of $300 million in nondollar currencies from the Fund in June 1962. Other transactions included repurchases totaling $21.1 million by 6 countries in Latin America, a repurchase of $12.5 million by Pakistan and $9 million by Turkey. Cumulative repurchases through December 31, 1963, totaled the equivalent of $5.1 billion (see table 4). The increased use of nondollar currencies in drawings and large repurchases in U.S. dollars had increased the Fund's holdings of U.S. dollars to approximately 75 percent of the U.S. quota by the end of 1963. Net drawings outstanding on December 31, 1963, amounted to $1.7 billion, a substantial decrease from the record $2.5 billion in net drawings at the end of 1961. Standby arrangements In addition to direct access to the Fund's resources through Fund drawings, member countries may also be assured of Fund assistance through the medium of standby arrangements or lines of credit. Under such arrangements, which normally run for 1 year, the member is assured of access to the Fund's resources up to an agreed amount. In the 6-month period under review, the Fund entered into standby arrangements in the equivalent of $1.7 billion with 9 member coun tries-Bolivia, Ecuador, El Salvador, Haiti, Honduras, India, Indonesia, the United Kingdom, and the United States (see table 5). TABLE 5.-International Monetary Fund standby arrangements—Amounts available under agreements in effect on Dec. 31, 1963 1 Under the terms of some agreements, amounts available under a standby have been reconstituted by repurchase and, to the extent that repurchases exceeded drawings, amounts available have been increased. Source: International Monetary Fund. The two largest transactions during the period, announced in July, were with the United States and the United Kingdom. The United States had not previously availed itself of the Fund's resources. Its standby arrangement with the Fund authorizes the United States to draw the currencies of other members of the Fund up to the equivalent of $500 million. Since the quota of the United States is $4,125 million, and the gold tranche is $1,031.25 million, the amount involved in the standby is less than one-half the sum which, under Fund practice, could be drawn by the United States on a virtually automatic basis. The standby arrangement is principally designed to permit other member countries to continue, in effect, to use dollars in making repayments to the Fund. Under the Articles of Agreement, when the Fund's holdings of the currency of any member country reach 75 percent of that country's quota, repurchases can no longer be made in that currency. By June 30, 1963, the Fund's holdings of dollars were virtually at the 75 percent limit as a result of repayments in dollars of earlier drawings by other member countries, so that further dollar repayments to the Fund were precluded. Under the standby arrangement, the United States is enabled to draw convertible currencies from the Fund and sell these currencies for dollars to other member countries for their use in making repayments to the Fund. These countries would otherwise have to con vert dollars in the exchange markets or make payments to the Fund in gold.80 The United Kingdom standby arrangement with the Fund authorizes drawings up to $1 billion over a 1-year period in currencies held by the Fund. The standby, which succeeds a similar arrangement in the same amount which expired in August, is intended to supplement the United Kingdom's reserves and indirectly to support the efforts of the United Kingdom to achieve more rapid economic growth. The resources which would be available to the Government of India under its $100 million standby arrangement with the Fund would assist that Government in meeting temporary balance-of-payments difficulties. The Indian arrangement succeeds a similar one which expired in July. The $50 million Fund standby arrangement with Indonesia is designed to support that country's program of economic stabilization. Standby arrangements were also concluded or renewed with Bolivia ($10 million), Ecuador ($6 million), El Salvador ($5 million), Haiti ($4 million), and Honduras ($7.5 million). On December 31, 1963, $1.7 billion was available under standby arrangements currently in effect. The U.S. Executive Director of the Fund, or his Alternate, acting on the advice of the Council, supported the decisions taken with respect to the foregoing matters. TECHNICAL ASSISTANCE AND TRAINING PROGRAMS In view of the substantial increase in membership and the increased demand for technical assistance, the Fund announced plans to enlarge its capacity to render such assistance to member countries. A fiscal affairs group, staffed with experts experienced in various aspects of fiscal affairs, including tax policy, tax systems, tax administration, and budgeting, is being organized as a new service of the Fund. An additional service will provide technical advice in the organization and operation of central banks. In providing this service, the Fund, in addition to using its own personnel, will recruit experts from established central banks. These may be sent to the requesting country to give advice or to serve temporarily in official positions. The Fund is also considering ways to improve and expand the usefulness of its training program for officials from member countries. In addition to the existing one in English, the Fund is presently setting up a training program in French as a service to the new members from French-speaking areas in Africa. * The first drawing by the United States under this arrangement, in the equivalent of $125 million-chiefly in Deutsche mark and French francs-occurred on Feb. 13, 1964. [Footnote in source text.] 1 Doc. II-77 THE INTERNATIONAL TELECOMMUNICATION UNION [See post, doc. X-94.] THE UNITED NATIONS EDUCATIONAL, SCIENTIFIC AND CULTURAL ORGANIZATION II-78 UNITED STATES SUPPORT OF THE UNESCO PROGRAM FOR PRESERVATION OF THE TEMPLES OF ABU SIMBEL: Statement Issued by the Department of State, June 12, 1963 8: 81 THE WORLD HEALTH ORGANIZATION II-79 ACTIVITIES OF THE WORLD HEALTH ORGANIZATION DURING 1963: Annual Report of the President (Johnson) to the Congress on U.S. Participation in the U.N., Transmitted August 20, 1964 (Excerpt) 82 The United States took an active part in shaping the program of activities of the World Health Organization (WHO) during 1963. With a view to furthering the attainment of the "highest level of health of all peoples," its long-range objective, the organization has planned its annual programs with three main purposes in mind: to provide assistance to countries for dealing with their immediate health needs, to help them in their efforts to strengthen their local and national health services, and to serve as an effective channel of communication on technical and scientific information relating to medicine and public health. The United States has urged the WHO, without prejudice to the malaria eradication campaign, which should continue to be given the highest priority, to give greater attention to smallpox, tuberculosis, and malnutrition which are serious health problems for a large number of countries. Also, it has stressed the importance of medical research in dealing with these and other health problems and has proposed that increased support be given to development of community water supplies. In assisting countries the organization provides consultants, sets up pilot projects, makes epidemiological studies, and, in case of emer 81 The Department of State Bulletin, July 1, 1963, p. 18. 82 U.S. Participation in the UN, pp. 293–297. |