A.—B

Section 2.—Special- Provisions for Capital Transfers If the Fund's holdings of the currency of a member have remained below 75 per cent, of its quota for an immediately preceding period of not less than six months, such member, if it has not been declared ineligible to use the resources of the Fund under Section. 1 of this Article, Article IV, Section 6, Article V, Section 5, or Article XV, Section 2 (»), shall be entitled, notwithstanding the provisions of Section 1 (a) of this Article, to buy the currency of another member from the Fund with its own currency for any purpose, including capital transfers. Purchases for capital transfers under this Section shall not, however, be permitted if they have the effect of raising the Fund's holdings of the currency of the member desiring to purchase above 75 per cent, of its quota, or of reducing the Fund's holdings of the currency desired below 75 per cent, of the quota, of the member whose currency is desired. Section 3. —Controls of Capital Transfers Members may exercise such controls as are necessary to regulate international capital movements, but no member may exercise these controls in a manner which will restrict payments for, current transactions or which will unduly delay transfers of funds m settlement of commitments, except as provided in Article VII, Section 3 (b), and in Article XIV, Section 2. ARTICLE VIT.—SCARCE CURRENCIES Section I.—General Scarcity of Currency If the Fund finds that a general scarcity of a particular currency is developing, the Fund may so inform members and may issue a report setting forth the causes of the scarcity and containing recommendations designed to bring it to an end. A representative of the member whose currency is involved shall participate in the preparation of the report. Section 2. Measures to replenish the Fund's Holdings of Scarce Currencies The Fund may, if it deems such action appropriate to replenish its holdings of any member's currency, take either or both of the following steps (i) Propose to the member that, on terms and conditions agreed between the Fund and the member, the latter lend its currency to the Fund or that, with the approval of the member, the Fund borrow such currency from some other source either within or outside the territories of the member, but no l member shall be under any obligation to make such loans to the Fund or to approve the borrowing of its currency by the Fund from any other source: (ii) Require the member to sell its currency to the Fund for gold. Section 3. —Scarcity of the Fund's Holdings (a) If it becomes evident to the Fund that the demand for a member's currency seriously threatens the Fund's ability to supply that currency, the Fund, whether oi not it has issued a report under Section 1 of this Article, shall formally declare such currency scarce and shall thenceforth apportion its existing and accruing supply of the scarce currency with due regard to the relative needs of members, the general international economic situation, and any other pertinent considerations. The Fund shall also issue a report concerning its action. (b) A formal declaration under (a) above shall operate as an authorization to any member, after consultation with the Fund, temporarily to impose limitations on the freedom of exchange operations in the scarce currency. Subject to the provisions of Article IV, Sections 3 and 4, the member shall have complete jurisdiction in determining the nature of such limitations, but they shall be no more restrictive than is necessary to limit the demand for the scarce currency to the supply held by, or accruing to, the member in question; and they shall be relaxed and removed as rapidly as conditions permit. (c) The authorization under (b) above shall expire whenever the Fund formally declares the currency in question to be no longer scarce. Section 4.—Administration of Restrictions Any member imposing restrictions in respect of the currency of any other member pursuant to the provisions of Section 3 (b) of this Article shall give sympathetic consideration to any representations by the other member regarding the administration of such restrictions. Section 5. Effect of other International Agreements on Restrictions Members agree not to invoke the obligations of Iny engagements entered into witli other members prior to this Agreement in such a manner as will prevent the operation of the provisions of this Article.

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