A New Monetary Situation

Abstract

The trends that had first become visible at the end of 1973 and the beginning of 1974 had deepened in nature by March of this year. One of these trends, which had been an innovation in December 1973, was a continuation either in actual borrowing, or in statements of intent by nation-states to borrow, from the international money market.* Thus France floated a second loan after the enormous success of her first venture into the market. In turn, the United Kingdom, in addition to making clear her intention to make the maximum possible drawings from the IMF and full use of swap arrangements, also indicated that she would likewise enter the international monetary market. Also, in anticipation of the deficits resulting from the increase in oil prices, the IMF began negotiations with oil-producing states with the intention of arranging special General Agreements to Borrow and making seven-year loans to members facing deficits.