International Monetary Fund

As early as January 19, 1948, the press reported that the devaluation of the French franc was under consideration by the French Government as a measure to stimulate French exports. Lengthy consultations between the French Director of the Fund (Mendès-France) and other officials of the Fund gave rise to the belief that agreement would be reached whereby the Fund could approve some devaluation of the franc. However, on January 25 the Fund announced that it could not permit the devaluation and that it regretted the decision of the French Government to proceed without the Fund's permission. Following French devaluation the following day, the Fund stated that it would continue to “work with the French Government in seeking a modification of these exchange practices in order to meet French needs within the framework of the international monetary arrangements established by the Fund Agreement.” The Fund subsequently accepted a provisional adjustment in its holdings of the franc from approximately 67,940 million to 122,292 million, representing an 80 per cent increase over January 24, 1948.