Articles of Agreement of the International Monetary Fund

Articles of Agreement of the International Monetary Fund
Article IV - Obligations Regarding Exchange Arrangements

http://www.imf.org/external/pubs/ft/aa/aa04.htm

Here is where Iraq has a problem.

They have stated that with a Low exchange rate their exports
are cheaper to market.

China does the same thing.

Article IV - Obligations Regarding Exchange Arrangements


Section 1. General obligations of members
Recognizing that the essential purpose of the international monetary system is to provide a framework that facilitates the exchange of goods, services, and capital among countries, and that sustains sound economic growth, and that a principal objective is the continuing development of the orderly underlying conditions that are necessary for financial and economic stability, each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates.
In particular, each member shall:


...avoid manipulating exchange rates... to gain an unfair competitive advantage over other members...

True SHM....but the difference between China and Iraq is that China exports more than they import.....Iraq on the other hand has to import nearly everything, including refined fuel....this is why Iraq needs purchasing power behind their currency.

I absolutely agree, that differance means everything!

Panhead wrote:

True SHM....but the difference between China and Iraq is that China exports more than they import.....Iraq on the other hand has to import nearly everything, including refined fuel....this is why Iraq needs purchasing power behind their currency.