Table 1. shares of Classifications Using the 1998 and 2009 Systems as of April 30, 2008 1998 de facto system 2009 de facto system Arrangement with no 10 Exchange arrangement with separate legal tender no separate legal tender Currency board 13 Currency board arrangement Soft peg Conventional fixed peg 68 Conventional pegged Stabilized of which: Intermediate pegs 13 11 Pegged exchange rate 3 Pegged exchange rate within vithin horizontal bands horizontal bands Crawling band 2 Crawl-like arrangement Managed floating 44 Floatin Independently floating 40 Free floating Other managed arrangements(residual na Total Source: Staff calculations. Information for end-April 2009 will be published in the 2009 Annual Report on Exchange Arrangements and Exchange Restrictions(AREAER), forthcoming IL. PRINCIPLES, OBJECTIVES, AND OPERATIONAL CONSIDERATIONS The classification of exchange rate arrangements is based on three broad principles capturing the outcome of actual exchange rate policies on a de facto basis as opposed to the announced or de jure arrangement avoiding value judgments on the appropriateness of monetary policies or the choice of adopting a backward looking approach that seeks to describe the outcome of past exchange rate policies and does not imply statements or views on future or intended4 Table 1. Shares of Classifications Using the 1998 and 2009 Systems, as of April 30, 2008 1998 de facto system 2009 de facto system Hard pegs 23 23 Arrangement with no separate legal tender 10 Exchange arrangement with no separate legal tender 10 Currency board arrangement 13 Currency board arrangement 13 Soft pegs 81 78 Conventional fixed peg 68 Conventional pegged arrangement 45 Stabilized arrangement 22 of which: Intermediate pegs 13 11 Pegged exchange rate within horizontal bands 3 Pegged exchange rate within horizontal bands 3 Crawling peg 8 Crawling peg 5 Crawling band 2 Crawl-like arrangement 3 Floating arrangements 84 75 Managed floating 44 Floating 39 Independently floating 40 Free floating 36 Other managed arrangements (residual) n.a. 12 Total 188 188 Source: Staff calculations. Information for end-April 2009 will be published in the 2009 Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), forthcoming. II. PRINCIPLES, OBJECTIVES, AND OPERATIONAL CONSIDERATIONS The classification of exchange rate arrangements is based on three broad principles:  capturing the outcome of actual exchange rate policies on a de facto basis as opposed to the announced or de jure arrangement;  avoiding value judgments on the appropriateness of monetary policies or the choice of the exchange rate arrangement;  adopting a backward looking approach that seeks to describe the outcome of past exchange rate policies and does not imply statements or views on future or intended policies