Monetary Sovereignty

Abstract This chapter explores the extent to which customary international law underpins the national right to issue money and to organize a monetary system. In so far as the currency of an issuing State is concerned, it may be said that the concept of monetary sovereignty exhibits features of both an internal and an external character. ‘Internal’ sovereignty includes the rights to define the monetary system, to devalue the currency, and to operate a monetary policy; ‘external’ sovereignty includes the right to impose a system of exchange control. The principle of monetary sovereignty becomes a little more obscure when one considers the ability of a State to determine the extent to which foreign monetary laws are to be applicable within the borders of that State. The chapter then looks at the effect of monetary sovereignty on international legal disputes, monetary legislation as confiscation, fair and equitable treatment of aliens, and other challenges to monetary legislation.