. INTRODUCTION Since 1998, the staff of the International Monetary Fund(IMf) has published a classification of countries' de facto exchange rate arrangements. Experience in operating thi classification system has highlighted several challenges, notably the residual category of managed floating has become overly heterogeneous; and intervention practices, which are used in characterizing arrangements, have become increasingly complex, while adequate data on intervention are sometimes not available The existing IMF staff classification system has been modified to address these and other issues(see Appendix I for the new definitions ). The revised classification will be published in the 2009 Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER)and in the IMF's 2009 Annual Report. Specifically, the 2009 AREAER will Intervening period. The revised classification of member countries'arrangements is also a include the revised classification at end-April 2009 and end-April 2008, and changes in the being used in all Article IV staff reports issued on or after February 1, 2009. It is intended to evise the classification series backward in time. Country authorities have the opportunity to comment on changes in classifications and discuss them with IMF staff before they are publish Key changes to the classification system include replacing the current distinction between managed and independent floating with two new categories: floating and free floating, with clearer definitions drawing a distinction between formal fixed and crawling pegs, and arrangements that re merely peg-like or crawl-like; increasing the transparency of the system by basing it on rules that can be implemented using specified information, with a more clearly circumscribed role for These changes are expected to allow for greater consistency and objectivity of classifications across countries, expedite the classification process, co and impr transparency, with benefits for the IMF's bilateral and multilateral surveillance The overall composition of arrangements using the previous and revised classification systems is shown in Table 1, below A chronology of the IMF's methodologies for classifying exchange rate arrangements is given in Appendix Il3 I. INTRODUCTION Since 1998, the staff of the International Monetary Fund (IMF) has published a classification of countries’ de facto exchange rate arrangements.1 Experience in operating this classification system has highlighted several challenges, notably:  the residual category of managed floating has become overly heterogeneous; and  intervention practices, which are used in characterizing arrangements, have become increasingly complex, while adequate data on intervention are sometimes not available. The existing IMF staff classification system has been modified to address these and other issues (see Appendix I for the new definitions). The revised classification will be published in the 2009 Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER) and in the IMF’s 2009 Annual Report. Specifically, the 2009 AREAER will include the revised classification at end-April 2009 and end-April 2008, and changes in the intervening period. The revised classification of member countries’ arrangements is also being used in all Article IV staff reports issued on or after February 1, 2009. It is intended to revise the classification series backward in time. Country authorities have the opportunity to comment on changes in classifications and discuss them with IMF staff before they are published. Key changes to the classification system include:  replacing the current distinction between managed and independent floating with two new categories: floating and free floating, with clearer definitions;  drawing a distinction between formal fixed and crawling pegs, and arrangements that are merely peg-like or crawl-like;  increasing the transparency of the system by basing it on rules that can be implemented using specified information, with a more clearly circumscribed role for judgment. These changes are expected to allow for greater consistency and objectivity of classifications across countries, expedite the classification process, conserve resources, and improve transparency, with benefits for the IMF’s bilateral and multilateral surveillance. The overall composition of arrangements using the previous and revised classification systems is shown in Table 1, below. 1 A chronology of the IMF’s methodologies for classifying exchange rate arrangements is given in Appendix II