[Boutique] Jamaica Agreement

During the discussion at the Jamaica meeting, the most heated issue was the gold and exchange rate system. After repeated consultations at the 5th meeting of the Interim Committee held on January 8, 1976, an agreement was reached on the exchange rate system, the gold issue, the expansion of the fund loan quota, and the increase in the share of Member States in the IMF. The meeting was held in Kingston, Jamaica, and was also called the Jamaica meeting. The agreement reached was called the “Jamaica Agreement” and its main points are as follows:

Floating exchange rate legalization

Member States are free to choose any exchange rate regime and can adopt a free floating or other form of fixed exchange rate regime. However, the exchange rate policy of Member States should be supervised by the IMF and negotiated with the IMF. The IMF requires countries to seek sustained economic growth under conditions of stable prices, stabilize the domestic economy to promote international financial stability, and try to narrow the exchange rate fluctuations, avoid manipulating the exchange rate to prevent adjustment of the balance of payments or obtain unfair competition. interest. The agreement also stipulates that member states adopting a floating exchange rate system should gradually restore the fixed exchange rate system according to economic conditions. After the stability of the world economy in the future, the 85% majority of the total voting rights of the IMF can be passed, and stable but adjustable Exchange Rate System. This part of the clause is to legally recognize the managed floating exchange rate system that has been in operation for many years, but at the same time emphasizes the IMF's supervision and coordination role in stabilizing the exchange rate.

Gold non-monetization

By abolishing the gold clause and canceling the official price of gold, the central banks of all member states can freely conduct gold transactions at market prices, and cancel the obligation between member states and between member states and the IMF to use gold to liquidate creditor's rights and debts. The gold held by the IMF should be processed step by step, of which 1/6 is sold at market prices, with its excess of the official price as a source of assistance to developing countries. In addition, the 1/6 judge price is bought back by the original Member State, and the remaining part is about 100 million ounces. It is processed according to the decision made by 85% of the total voting rights, sold to the market or purchased by each member country.

Increase the status of international reserves of special drawing rights

The amendments to the relevant provisions of the SDR, so that the SDR gradually replaces gold and the US dollar and become the main reserve agreement of the international monetary system, stipulate that all Member States can freely conduct SDRs transactions without the consent of the IMF. The transactions between the IMF and the Member States replace gold with SDRs, and the assets held in the IMF's general account are always expressed in SDRs. Expand the use of SDRs in the IMF's two business transactions and maximize the use of other SDRs. In addition, the IMF should supervise the SDRs system at any time and modify or increase or decrease the relevant regulations as appropriate.

Expanding financial resources for developing countries

Establish a “trust fund” to generate proceeds from the sale of gold and provide loans or assistance to the poorest developing countries on preferential terms to address their balance of payments difficulties. The quota for expanding the IMF credit part of the loan increased from 100% of the member country's share to 145%, and the quota for the “export volatility compensation loan” was relaxed, from 50% of the share to 75%.

Increase the share of funds of Member States

The basic share of Member States’ contributions to the IMF increased from the original 29.2 billion SDRs to 39 billion SDRs, an increase of 33.6%. The share of the share of all member countries has also changed, mainly due to the doubling of the proportion of oil-exporting countries, from 5% to 10%, and other developing countries remain unchanged, with the exception of West Germany and Japan in major Western countries. In addition to the increase, there is a decrease. According to the "Jamaica Agreement", the IMF's Executive Board completed the revision of the provisions of the IMF Agreement in March 1976 and sent it to the Council for a written vote. In April of the same year, the IMF Council adopted the Second Amendment to the IMF Agreement. On April 1, 1978, the revised IMF Agreement was passed by more than 60% of the statutory Member States and more than 80% of the votes. Officially in force.