ABSTRACT
Article IV of the IMF Agreement, as amended in 1978, allows each member to choose its exchange arrangements and to determine the external value of its currency. Since the exchange rate of a country's currency is not only one of the most important prices in the national economy of the country concerned but at the same time an international relationship with the economies of other countries, Article IV subjects the member's exchange rate policies to certain obligations and to multilateral surveillance by the Fund. But these "general obligations of members" (Article IV:1) are "softer" than the provisions of the original Article IV on par values; they are in part confined to deliberately vague guidelines which, given the uncertainty in international monetary relations since the advent of widespread floating exchange rates in 1973, preserve 182a large degree of national discretion. Their non-observance does not necessarily constitute in itself a breach of law. 2
