The financial encyclopedia uses cookies to improve your user experience. Find out more here!


       

 

 

Scarce currency clause
 

 

A provision in the original rules of the International Monetary Fund (IMF), to deal with the problem that its stocks of any one particular currency might run out. The clause provided that if the IMF ran out of stocks of a country's currency, this could be declared a ‘scarce currency’, upon which members would be entitled and expected to discriminate against the country's goods in their trade policies. It was widely expected during the late 1940s that the US dollar would become scarce, though due to the Marshall Plan and other US bilateral aid programmes this did not in fact occur. See also discrimination.

Reference: Oxford reference