The Annual Report of the Executive Directors of the International Monetary Fund for the fiscal year ended April 30, 1954, was transmitted to the Chairman of the Board of Governors on July 1, 1954. During the period under review, the report noted, important steps toward currency convertibility had been taken in several countries, notably Belgium, Luxembourg, Germany, the Netherlands, and United Kingdom; restrictions on dollar imports had been lightened, exports of domestic capital had been freer, and more reliance had been placed on the regulative powers of the price mechanism. The easing of restrictions had gone hand in hand with an improvement in the world balance of payments equilibrium, and a reversal, during 1953, of the downward trend in the volume of world trade which had appeared early in 1952. Sound fiscal and monetary policies had improved the competitive position of Europe which had experienced more stable prices and less inflationary pressure; the report cautioned that the coincidence, up to mid-1953, of a high level of business activity in the United States with slack demand conditions in western Europe had been a purely fortuitous aid in improving the latter's balance of payments position. Progress toward convertibility had been made possible by a general improvement in economic conditions; however, problems would be involved in taking further steps toward convertibility. Among these were: 1) the problem of controlling international movements of capital, and 2) the importance of having countries whose balance of payments position was weak, as well as those with a stronger position, move concurrently towards convertibility.