I.              ORIGINS OF THE TRADE

 


The dawn of financing international trade originated in countries of Europe and America. (1984) Local goods were shipped from these countries though the provision of capital demands by financing institutions. These institutions also fund the repair of ships and even fees paid for port payables. The transactions dealt with the use of warehouse receipts, bills of exchange and sometimes the traders utilize notes that consequently evolved as currency among import-export traders.


 


In the culmination of World War II, these financing institutions aiding local traders eventually evolved into commercial banks with high regards to their own respective domestic economy but are rather aggressive in international trade. Since the end of the Second World War, the industrialized countries’ desire to promote their exports of capital goods, combined with the inadequacy of the developing countries’ capacity to import capital goods for their expanding development needs, has resulted in profound changes in the methods by which international trade in such goods is financed. ( 1966)


 


Exports of capital goods on credit were carried out within the framework of bilateral payments agreements, which, because of the shortage of international reserves of gold and convertible currencies, had become the basic instruments for the financing of trade among non-dollar countries. (1966) From the mid nineteen fifties onwards, exporters in almost all western European countries began exerting pressure on their governments to provide export credit insurance for periods in excess of five years.


 


Attempts to establish and maintain orderly arrangements for the provision of export credit insurance and export credits are under way at the government level within the European Economic Community (EEC) and the Organization for Economic Cooperation and Development (OECD). (1966)


 


In the highly competitive, international marketing situation that exists today, exporters must receive adequate support from their financial institutions if they are to perform successfully. ( 1984) This phenomenon gave rise to a whole new system of trade known as export financing. The succeeding discussions shall incorporate several aspects of the system and how it is used in the several countries.


 


The above descriptions illustrate the degree of official support of and eventual intervention in the financing of export credits. According to an article published in Paris in 1982 entitled The Export Credit Financing Systems In OECD Member Countries, the official support, which would not have been set up by the private sector, is usually provided through governmental or governmentally supported credit insurance or bank guarantee facilities.


 


While the normal function of export credits is to serve as an instrument for financing international trade, medium-term and especially long-term export credits have nevertheless become an important source of external financing for development projects in developing countries. ( 1966)


 


II.            FUNCTIONS OF FINANCIAL INSTITUTIONS


 


It was stated earlier that several financing institutions geared on funding traders consequently turned into commercial banks. These commercial banks adhered to the same orientation as they were in their initial stages as funding organization. However, banks in many developing countries play a relatively limited role in the national trade promotion effort.  They often consider that it is the business of the government and of exporters to work out strategies for developing and promoting exports. ( 1984.)


 


The existing financial institutions matured into three types: the Central bank, Commercial banks, and development banks. ( 1984) Central banks manage the currency of individual nations, the public debt and the foreign exchange reserves of the country. On the other hand, Commercial banks collect deposits and make short-term loans to individuals and institutions in the country. While Development banks make medium and long-term loans to the industrial sector from funds received primarily through governmental budgetary allocations and international financial institutions.


 


 Central banks have a dominant role to play in export financing. ( 1984.) However, many of them do not have a special scheme for developing and promoting exports. In a collection of articles funded by the International Trade Center, it stated that a central bank should formulate its policies and gear its operations so as to find solutions to the country’s overall economic problems. The Article stated that in the interest of trade promotion, a central bank should consider undertaking several activities. It stated that a central bank should engage in studying the commercial banks’ export credit policies on a product-by-product basis, since export financing problems vary from one item to another. After these analyses, there should be a discussion of the results of these studies with commercial banks and assisting them to formulate special schemes for granting adequate financing to exporters at a pre and post-shipment stages, at concessional rates of interest. Consequently, the central bank should introduce a special scheme to refinance loans granted by commercial and development banks to the export sector by ensuring a reasonable margin between the commercial and development banks’ lending rates and the cost of the Central Bank’s refinancing facility. Furthermore, it should also introduce a foreign exchange revolving fund to meet the foreign exchange needs of the producers of export goods and allow the commercial banks to lend above their normal credit ceiling (if one exists), in order to grant export loans. Moreover, the central bank should collect statistics periodically from the commercial banks on export financing that they grant, to use as a basis for making policy decisions on export loans. Likewise, is should engage in establishing a special export credit unit within the central bank to study the financial and non-financial problems of the export sector and to suggest and implement remedial measures. And finally, these central banks should study the advisability and feasibility of setting up a special department, within the Central Bank initially and later by establishing a specialized institution for introducing export credit guarantee and insurance schemes.


 


In addition, central banks should monitor the flaws of the trade. There are inherent limitations ( 1984) to the growth potential of traditional export products, which the financing institutions should consider. First, there is the inelasticity of international demand for many of the products. Second, there is a continuously rising domestic demand resulting in limited availability of products for export. Moreover, higher domestic prices in respect of several commodities compared with international prices, which weakens the effort to export. In fact, there is a growing competition in world markets as well as emerging substitutes. And finally, these financial institutions should monitor the quantitative and other restrictions imposed by the developed countries in order to have an edge among its competitors.


 


In the developed market economies, the financing institutions provide export credits for the purchase of capital goods. These export credits take two basic forms: suppliers’ credits and buyers’ credit (the latter also being referred to as financial credits. (United Nations, 1966) Suppliers’ credits are granted by suppliers to buyers on a medium-term basis (credits of between one and five years) or on along-term basis (credits of between five and usually up to ten years). On the other hand, since few suppliers selling on deferred payment terms have sufficient resources to bridge the credit period; most of them finance the credits they have granted by borrowing from a credit institution. The credit institution often refinances the credit it has financed with an export credit institution, the central bank or a special credit refinancing institution.


 


Export finance is frequently furnished to the exporter on a case-to-case basis under government-backed export financing schemes providing preferential refinance to commercial banks through the central bank. It can be exasperating and time-consuming for the exporter to apply for a loan for each export contract and equally inconvinient for the bank to consider a series of loan applications.


 


Such delays can be detrimental to the quality of the products to be exported. These delays would involves the commercial bank may take its time in checking the exporter’s application and disbursing loans. Consequently, the commercial bank may not be furnished with the preferential refinance by the central bank immediately after each disbursement of export credits to the exporter.


 


Normally, the supplier obtains the bargaining advantage since they are the ones who are able to dictate the price of a commodity to be traded. However, competition in world markets and situations such as stated above, both for consumer and capital goods, is becoming increasingly intensified. In this situation, the bargaining power has shifted from the seller to the buyer, who tends to dictate terms in regard to price, quality and delivery schedules, and above all, insists on appropriate credit terms. The exporters’ capacity to offer the buyer deferred payment terms is of particular importance. Stringent financial policies in many buyer markets, characterized by credit squeezes, also induce buyers to press for easier terms of payment.


 


III.           INTERNATIONAL COUNTERPARTS

 


The rising role of financial institutions as a leading supporter of export trade has been an international phenomenon. According too an article entitled Institutional Arrangements in Developing Countries for Industrial and Export Financing with a view to Expanding and Diversifying their Exports of Manufactures and Semi-manufactures, The successful expansion and diversification of exports of manufactured and semi-manufactured goods depends on a variety of factors such as quality, price, delivery periods and after-sales service.


 


In an article made by  entitled The Changing Nature of Export Credit Finance and Its Implications for Developing Countries, he stated that the competition among countries imparted an evolution of export finance among developing countries. One such change is the availability of a growing source of external capital on terms below the prevailing market costs. Another implication is the emergence of the more advanced developing countries as providers of subsidized finance to promote their own rising exports of manufactured goods. Postwar industrial recovery had largely been completed, and the output of engineering goods, ships, power plants and the products of other industrial sectors with a high degree of technology grew rapidly by the mid-1950’s. Similarly, governments began to increasingly develop various forms of financial support, such as the blending of public with private funds. The government also provided for the refinancing facilities and subsidized interest in order to soften the terms of export finance and thus enhancing the competitiveness of their exporters.


                       


To illustrate, in 1959, the net flow of private export credits (Cizauskas) supported by OECD member countries amounted to 0 million. After twenty years, in 1978, the net flow had risen to .7 billion. Of these credits, informed sources estimate that more than half now consist of private bank buyer credits. Rapidly industrializing countries like Korea, Brazil, Mexico, Taiwan, Yugoslavia, Greece and the Philippines are the principal recipients of OECD-supported export finance.


 


In developing countries’ manufacturers and exporters face a threefold competitive disadvantage by comparison with the export sector in developed market-economy countries with regard to obtaining finance in adequate measure and at reasonable cost. Initially, developed market-economy countries’ production and export of manufactured goods constitute an established sector of the economy, which is able to offer the commercial banks an attractively large volume of business. Furthermore the general level of money market interest rates in developed market-economy countries is usually markedly lower than the interest rate level in developing countries. And finally, the export sector in the developed market-economy countries normally has no difficulty in furnishing adequate bank collateral.


 


Several countries have a manifold of systems to aid their respective local traders. To illustrate, Brazil has a short-term pre-shipment finance for exports with a production cycle of less than 180 days is also furnished by the Banco do Brasil, in addition to the refinancing facilities of the central bank. (Institutional Arrangements in Developing Countries for Industrial and Export Financing with a view to Expanding and Diversifying their Exports of Manufactures and Semi-manufactures) Although Banco do Brasil financing system is not as advantageous as concessional central bank finance, the interest rates charged to the exporter are still well below market rates. In most of the developing countries that have established concessional export refinancing schemes, the refinancing is provided by the central banks.  Colombia and Mexico, for the purpose of refinancing the commercial banks that grant export finance to exporters, operate special export financing funds. In Colombia, the Fondo de Promocion  Exportaciones (PROEXPO) operates as a branch of the Ministry of Economic Development is administratively autonomous, a public legal entity, and financially independent. In Mexico, on the other hand, the Fondo para el Fomento de las Exportaciones de Productos Manufacturados (FOMEX) is administered jointly by the Secretariat of Finance and Public Credit and the Banco de Mexico, which have concluded a contract under which the Banco de Mexico is designated as the trustee of the export financing program of FOMEX.


 


The United States of America and Japan have each set up a state-owned Export-Import Bank. The assets of these banks are completely authorized by their respective governments. The export finance is provided in accordance with the commercial banks. (Institutional Arrangements in Developing Countries for Industrial and Export Financing with a view to Expanding and Diversifying their Exports of Manufactures and Semi-manufactures) In the Federal Republic of Germany, government assistance in providing preferential medium-term and long-term export credit rendered in two forms. First, the Ausfuhrkredit GmbH (AKA), which is a private banking consortium consisting of about 50 commercial banks, has been given a special line of rediscount credit with the central bank. Secondly, the Kreditanstalt für Wiederraufbau (KfW), the official executive agency for capital aid programs for developing countries, lends government funds for cheap rates for the financing of capital goods exports to developing countries. In France, the government-controlled Banque Française du Commerce Extérieur provides preferential finance in the case of export credit maturities exceeding seven years, whereas maturities of between one and a half years and seven years can be partially refinanced at a concessional rate with the central bank. In Belgium, Creditexport has at its disposal a revolving fund, about half of which is provided by the public institutions, is an export credit institution jointly formed by the country’s main commercial banks and three public financial institutions. The scheme operated in Italy for financing medium-term and long term credits is based on the major medium-term credit institutions which finance export credits and then have recourse to an official rediscount agency, the Midiocredito Centrale. In the United Kingdom, where no specialized institution for export credit financing has been established, the government-supported scheme for the provision of preferential medium-term and long-term export finance is administered by the Export Credits Guarantee Department (ECDG), the official export credit insurance institution. In the Republic of Korea, the Korea Export-Import Bank, established in 1969, provides finance and banking services for long-term exports. Primary sources of funds are the nation’s government and the National Investment Fund. In India, the Industrial Development Bank of India (IDBI) is responsible for the operation of schemes for the provision of medium-term and long-term export finance.


 


IV.          THE PHILIPPINE FRAMEWORK

 


On the earlier period of the nation, the Export Credit Corporation administered the financing of export traders. This body is discussed in an article, Credit Guarantees for the Filipino Exporter (1981), in the publication Philippine Development. The body was created by virtue of PD No. 1785 also known as The Charter of the Export Credit Corporation.  According to the article this agency came as a blessing to a sector distressed by the lack of enough credit, guarantees and insurance facilities at preferential rates and liberal terms and conditions to make local goods competitive in the international market.


 


As prescribed by the charter, the ECC is empowered to generate funds, provide liberal credit to local exporters and import-substituting industries, and to extend export guarantees and insurance facilities. It also aimed to promote the local capital goods industry with the end in view of eliminating the country’s dependence on foreign sources for capital equipment and machineries. The ECC is also geared to arrange for the guarantees covering political and commercial risks to, or for the benefit of, persons or entities engaged in business in the Philippines, banks and financial institutions, in connection with the financing of exports and the promotion of import substitution.


 


To be specific, the ECC has seized several roles such as extending direct loans or other credit facilities in the Philippine or foreign currency to finance export contracts and foreign trade transaction of any person and entities at competitive interest rates and charges. As well as to finance the sales of domestically manufactured capital goods. Furthermore the ECC is equipped to give grants or subsidies, in Philippine or foreign currency, to supplement any interest receivable by any persons or entities extending the export and import-substitution loans or guarantee, and for their purchase, discount, rediscount, sale and negotiation (with or without endorsement) of notes, drafts, bills of exchange, acceptances. This also includes banker’s acceptances and other evidences of indebtedness. It also enters into contracts of insurance against the risk of war, expropriation, restriction on remittances and such other risks which are deemed by the ECC of noncommercial nature in connection with export contracts and transactions. It also acts as an agent for any persons, entity, government or agency of a government in connection with export contracts and transactions. Likewise, it is also set to issue bonds and to borrow money from local and/or foreign sources as well as to invest its funds in any activity related to import and export substitution and in any bonds or securities issued or guaranteed by the Philippine government. It could also purchase, hold, alienate, mortgage, pledge or otherwise dispose of the shares of the capital stock, bond, security of other corporations or associations, local or foreign, and to exercise all the rights of their ownership including the right to vote on them. And lastly, it is aimed to acquire assets, real or personal, or their interest, and encumber or dispose it otherwise in the conduct of its business.


 


On the other hand, an article entitled Export Guide (Part 2): Export Financing (1983) published in Countryside Banking stated that the foremost sources of financing of the country comes from private domestic sources such as commercial banks, investment banks, life insurance companies, financing companies, and private development banks. Likewise, selected commercial banks may be able to secure themselves of the Industrial Guarantee Loan Fund (IGLF) assistance to service the financing needs of projects qualified for funding by IGLF.


 


Exporters may avail several incentives and privileges. For example, the Central Bank provides certification to Export-Oriented Firms. This certification is entitled to certain privileges such as shorter repayment period allowed on foreign borrowings and importation of machinery, equipment, raw materials and supplies from abroad payable through an export deduction arrangement, subject to certain CB conditions. Furthermore, this certification exempts the firms for the prior CB approval required for the importation of machinery and equipment payable within 360 days unless specifically required to be referred to CB. Likewise, the certification also furnishes the exporter full repatriation of foreign investments in the firm and full remittance of profits and dividends accruing to its non-resident investors. The certification grants more liberal travel allowances for officers of the firm under MAAB No. 26 dated Aug. 16, 1982 and MAAB No. 27 dated Aug. 16, 1982. Preferential rediscounting rates and values for credit instruments of the firm is also obtained through the availment of the certification. And lastly, the firms are given the authority to obtain foreign currency loans under CB Circular No. 343 dated April 24, 1972, subject to prior CB approval and Exemption from the marginal deposit requirement on import letters of credit.


 


            The availment of privileges and incentives through being Central Bank Certified Export-Oriented Firms follow certain requirements. As stipulated in the Central Bank Memorandum to Authorized Agent Banks dated February 21, 1970, stated that only firms engaged in the processing or manufacture of finished products for exportation, in which at least 70 percent of total materials used consist of indigenous raw materials and firms engaging in the processing or manufacture of finished products in which the actual or potential net foreign exchange earnings of each individual firm a year shall not be less than ,000.00 may qualify for certification as Central Bank export-oriented firms.


 


                  On the other hand, the Export Incentives Act (now revised and consolidated into the Omnibus Investments Code, Presidential Decree No. 1789) is a law granting several freedoms for exporters. All registered enterprises engaged in the export of food and food products shall be granted the following incentives to the extent engaged in their area of investment and subject to the provisions set by the BOI. As a registered export producer enterprise, one is privileged to acquire a deduction of organizational and pre-operating expenses incurred by the enterprise from its taxable income over a period of not more than ten years. Similarly, one has the option to use accelerated depreciation in its accounting system for tax purposes and a privilege to carry-over net operating loss incurred in any of the first ten years of operations, as a deduction from taxable income. Firms are provided also with an exemption from tariff duties and compensating tax on importation of capital equipment within seven years from registration. Firms may also be provided with a tax credit equivalent to 100 percent of the value of the compensating tax and customs duties that have been paid on domestic capital equipment used, had these been imported. Not to mention a tax credit for taxes withheld on interest payments on foreign loans provided that no such credit is available to lender-remitee in his country; and that the registered enterprise has assumed the liability for payment of the tax due from the lender-remitee. Furthermore, enterprises which establish their production or processing in an area deficient in infrastructure and public facilities, may apply in payment of taxes due from it to the government an amount for registered export products bought by it from registered export producers qualified to avail of such exemptions. Such exemptions includes the immunity from specific and sales tax on products exported by it under such guidelines as the BOI may formulate and a tax credit equivalent to the amount of specific and sales taxes on registered export products bought by it from export producers. Moreover, an additional deduction equivalent to 20 percent of total export sales, from its taxable income from the domestic and export sales and from other registered operations, for the first five years from registration or start of commercial operation.  After registration or commercial operation, an additional deduction of 1 percent of total export sales to export traders which extend financial assistance to export producers for a period of five years. Correspondingly, after registration or commercial operation, a deduction of expenses for establishing and maintaining offices abroad, from taxable income from domestic and export sales and from other registered operations for a period of five years.  And finally, whenever the export trader uses a new brand name for its export product an additional deduction from taxable income equivalent to 1 percent of the increment of its export sales during the year in which the incentive is claimed to the export sales of the preceding year.


 


As a registered export trader enterprise, the law covers an exemption from any export tax, fee or impost under a previous registration in another name as well as tax-free importation of tools, gadgets, machinery, or equipment not available locally and which shall be for the exclusive use of the NACIDA registered entity. And lastly, an export trader acquires a promotion/marketing assistance, production assistance, skill development and technology assistance, credit and loan assistance, and raw material assistance.


 


In an article of  (1995), he stated that the export sector has been identified as the main vehicle for the economic take-off of the country. He further stated that the present government has anchored its bid for NIC-hood in this sector.  Therefore, the survival of this sector in international trading competition determines whether the Philippines will be among the ranks of NICs or will continue to be the “Sick Man of Asia.” In particular, the purpose of his article was to focus on improving access to credit of small and medium enterprises to export financing at internationally competitive rates. According to  this is a must for national security because this is the largest sector in the export industry and has the potential to maximize benefits from improved competitive status.


 


Genito further coined that the present aeon is an economic century, that the instruments of war are no longer armaments but manufactured goods exported to captured markets. (1995) The government promotes exports by encouraging foreign investors to come to the country and by providing both local and foreign investors with incentives. Thus, for example, the incentives given by the Board of Investments (BOI) are income tax holidays of 4 to 6 years; duty free importation of capital equipment; tax credits for taxes and duties on raw materials used in the manufacture, processing or production of export products. Some of the non-fiscal incentives are the simplified custom procedures; unrestricted use of consigned equipment; employment of foreign nationals and issuance of special investor’s resident visa (SIRV).


 


In order to enhance the operating environment, the government also lifted the foreign exchange control; extended long-term leases of private lands to 75 years for foreign investors; reduced tariff under EO 470 (1991-1995) and AFTA/CEPT starting 1994; reduced duties of imported capital equipment to 3% or 10% only; has an ongoing lifting of import restrictions; and simplified investment regulations and incentives. ( 1995) Fresh capital, which otherwise cannot be generated from within the economy, is expected to flow from outside to propel economic activities in the country and provide jobs for the people of the nation. The incentives so far given are enjoyed by those who are already well established and entrenched, financially and market wise.  They constitute only less than 3% of the export sector.


 


A firm cannot capture large export volumes if it does not have sufficient capital, which can only come from two sources: own finances or from credit which comes from either the informal or formal sources.  Experience shows that self-financing cannot sustain the needs of export financing.  Thus, financing can come only from borrowed capital. ( 1995)


 


There are around seven special credit programs, which can be tapped for export financing.  These are the Agricultural Loan Fund, the Industrial Guarantee and Loan Fund, the Export Industry Modernization Program, the Export Development Assistance Project, the Philippine International Trading Corporation (PITC) Financing Facility for Export Producers, the Transactional Financing and the APEX Refinancing Program.  All of these, however, require collateral before financing can be extended. ( 1995)


 


There are also a number of Export Credit Guarantee Schemes that can be availed of.  These facilities include the Guarantee Fund for Small and Medium Enterprises (GFSME) and the Philippine Export and Foreign Loan Guarantee Corporation (Philguarantee).  As of last count, there are eight guarantee institutions, six of which provide guarantee services and five have small and medium enterprises as their beneficiaries.  However, only direct importers with solid financing backing seem to be able to access these facilities. ( 1995)


 


A milestone policy change was also effected in 1991 when the CB opened its rediscounting facility to indirect importers in order to encourage commercial banks to lend to this export subsector.  Apparently, the banks did not receive this very well as evidenced by a less than one-percent performance of loans to indirect exporters against the total CB rediscounting for 1992.  The culprit again in this case is the unwillingness of the banks to lend to this group because majority cannot put up the needed collateral. ( 1995)


 


The complete list of normal functions typically offered by the national export credit agency ( 1995) includes short-term credit that will be able to meet pre and post-shipment financing needs. It also includes supplemental short and medium term rediscount facilities to ensure liquidity and funding support for the financing of the export sector at all times. Thirdly, the national export credit agency provides medium and long-term credit to foreign buyers, particularly for capital goods exports as well as medium and long-term credit to exporters for capital investment needs. Likewise, it also provides pre-shipment financial guarantees to banks to encourage working capital lending to collateral-short exporters. Furthermore, it also furnish short-term post-shipment export credit insurance to protect exporters and their financing banks from the credit and political risks of overseas sales, especially those made on other than confirmed Letter of Credit basis. And lastly, the agency cater technical assistance to exporters and bankers in the areas of credit and country information, training in risk management, and techniques of financing foreign trade.


 


Furthermore,  pointed out several export-financing issues in the Philippines. According to several literature reviews point out that there are at least four outstanding issues in Philippine export financing. First was the access and availability of credit. There is a scarce number of financing institution to support export traders. Second is the competitive cost of credit. This is entailed with the lack of exporters’ access to competitive rates of credit. Third is the delivery system and mechanism and lastly is the role of informal credit delivery system as it bears on the financing needs of the exporters.


 


According to the article, there is only two major institutional supports that has been identified and discussed by previous works, the Central Bank Rediscounting Window and FCDU. However, there has been a sharp decline in Central Bank rediscounting exports. This may be caused by the opening of the FCDU loan windows to exporters at internationally competitive rates. Furthermore, it may also be caused by the relatively high liquidity experienced by banks between 1991 and 1992 when traditional deposits grew from P351 to P493 billion and when interest rate on time deposit declined from an average of 20% in 1991 to 13% in 1992.


 


At the institutional level, according to  the most important lesson to be learned is capital adequacy. The capital should initially be at least 25% of the anticipated loans and guarantees. A second important lesson is management.  There is a tendency for a mixed type of management organization (government and private sector) and the hiring and firing of personnel is nearest to private sector practice and less akin to government bureaucracy. Furthermore, an appropriate fee structure should also be considered as a factor. In order to be fully successful, export credit agencies must offer a range of products, including loans, guarantees, insurance and technical assistance.  This effectively not only makes a high impact on the export sector but also cushions the low returns of some activities with high returns in other activities. Furthermore there should be efficiency of procedures. Red tape should be eradicated or at least minimized. Likewise, appropriate collateral practices should also be exercised.  The underlying policy emphasizes taking minimum security consistent with acceptable risk parameters. Finally, technical sophistication by using the latest techniques and teaching these techniques to end users in order to maximize exporters with minimal risks.


 


In the documentary research conducted ( 1995), it would seem that the most favorable export financing strategy that most NIEs and developed country resorted to be the establishment of an Export-Import Bank (EXIM Bank) and a guarantee institution. Furthermore, these financial institutions will be usually handling the financing component while the government usually handles the guarantee part of the program. The United States, Canada, Japan, Korea and Taiwan are those among the well-established EXIM Banks in the world.  Surprisingly, India, Jamaica and Columbia have also EXIM Bank operations.  There are approximately 21 national EXIM Bank in existence (FWA Ltd., 1993), three are mixed, one (Austria) is private and ten of which are government-owned. These countries’ experiences also highlighted the least dependence on reserve requirements as a means to influence interest rates and to pursue a policy of freely floating currencies to properly manage their foreign exchange rates.


 


 


 


 


 


 


 


 


 


 


 


   

 


 


 



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