Definition of The IMF’s Exchange Rate Regime Classifications

The International Monetary Fund classifies all exchange rate regimes into eight specific categories (listed here with the number of participating countries as of October 2001). The eight categories span the spectrum of exchange rate regimes from rigidly fixed to independently floating:

Exchange Agreements with No Separate Legal Tender (39): The currency of another country circulates as the sole legal tender or the member belongs to a monetary or currency union which the same legal tender is shared by the members of the union.

Currency Board Arrangement (08):A monetary regime based on an implicit legislative commitment to exchange domestic currency for a specified foreign currency at a fixed exchange rate, combined with restrictions on the issuing authority to ensure the fulfillment of its legal obligations.

Other Conventional Fixed Peg Arrangement (44): The country pegs its currency (for mall or de facto) at a fixed rate to a major currency or a basket of currencies (a composite), where the exchange rate fluctuates within a narrow margin or at most + 1 percent around a central rate.

Pegged Exchange Rates within Horizontal Bonds (6): The value of the currency is maintained within margins of fluctuation around a formal or de facto fixed peg that are wider than + 1 percent around a central rate.

Crawling Pegs (4): The currency is adjusted periodically in small amounts at a fixed, pre-announced rate or in response to changes in selective quantitative indicators.

Exchange Rates within Crawling Pegs (5): The currency is maintained within certain fluctuation margins around a central rate that is adjusted periodically at a fixed pre-announced rate or in response to change in selective quantitative indicators.

Managed Floating with No Pre-Announced Path for the Exchange Rate (33): The monetary authority influences the movements of the exchange rate through active intervention in the foreign exchange market without specifying or pre-committing to a pre-announced path for the exchange rate.

Independent Floating (47): The exchange rate is market-determined, with any foreign exchange intervention aimed at moderating the rate of change and preventing undue fluctuations in the exchange rate, rather than at establishing a level for it.