India and international monetary management

International monetary management is concerned with governing the conduct of international economic transactions, the methods of financing deficits and surpluses in internat payments and the manner in which countries are expected to respond to such deficits and surpluses. The present system of International Monetary Management, which arose to a large extent from the 1944 Bretton Woods Conference, is in sharp contrast to that of the inter-war period, particularly the 1930's, when countries pursued their financial policies with little regard for, and little understanding of, the effect that these policies might have on other countries.

The present system comprises the provisions of the Articles of Agreement of the International Monetary Fund which are designed to foster the interconvertibility of currencies. It includes the par value system, under which a country is expect ed to maintain a fixed value for its currency relative to gold and to other currencies-alteration of the value being reserved to circumstances of fundamental disequilibrium and requiring consultation with the Fund and; in most cases, the Fund's concurrence. It comprises also those provisions of the Articles of Agreement of the Fund and of the GATT under which restrictions on currency payments and on trade are generally. allowable only in situations of balance of payments difficulty and are subjected to international regulation. In addition, it embraces all those de facto practical arrangements which give life and reality to the legal provisions.