The United States and other members of the "Group of Ten" industrial nations are expected to take a modest step toward promoting greater stability of international exchange rates when they meet in Tokyo next week.
The group will propose that the International Monetary Fund be empowered to exercise closer "surveillance" of the economic policies of the 10 industrial nations with a view to promoting greater stability in currency relationships, according to a draft report.
At the same time, the finance ministers and central bank heads of the Group of Ten countries would join in "multilateral surveillance" of each other's policies by reviewing, in advance of publication, a report by the IMF assessing each country's performance.
The Group of Ten, which actually has 11 members, consists of Belgium, Britain, Canada, France, Italy, Japan, the Netherlands, Sweden, West Germany, Switzerland and the United States.
These steps have the endorsement of the Reagan administration, which views them as a realistic effort to improve the present system, while avoiding more radical proposals backed by France and some Third World nations. Although the G-10 report falls short of what France had hoped to accomplish, sources said they did not expect the French to dissociate themselves from it.
The report also is expected to turn down a French proposal for a major addition to international liquidity through creation of more Special Drawing Rights (SDRs), the IMF's international paper currency. Third World nations, supported by the French, had been lobbying for a new round of SDRs.
If ultimately accepted by the IMF's policy-making Interim Committee, representing all of the 140 member nations, the revamped international monetary system for the first time would expose each major nation to the pressure of its peers: high officials of each nation would be openly discussing whether the IMF -- through Managing Director Jacques de Larosiere -- had found the economic policies of each of them acceptable.
Those familiar with the report say that if these proposed measures had been in effect in the past few years, the IMF would have been putting more public pressure on the United States to slash its budget deficit, and on Japan to open up its markets to foreign trade.
There would be no sanctions to enforce the IMF's judgment -- or the collective judgment of a group of nations -- on one of them. "This all depends on the will of sovereign nations to cooperate," one official explained. "If we don't have that, no amount of surveillance will save us."
In opting for this "improvement" of the current system, the Group of Ten is rejecting a proposal originally made by French President Francois Mitterrand for a wholesale reform of the system.
The French, unhappy with the strong dollar and a depressed French franc, had urged the creation of "target zones" for the dollar, the yen and European currencies as a way of keeping them in closer alignment. "They [the French] were entirely isolated on this," said an authoritative source.
"There is no alternative to the present system, and most of our countries don't want major changes, because they don't believe there is a better system," said a key official.
The meeting in Tokyo on June 21 will follow a preliminary session next Thursday of the Group of Ten deputies, chaired by Lamberto Dini, deputy governor of the Italian central bank.
The June 21 meeting will be chaired by Japanese Minister of Finance Noboru Takeshita. Treasury Secretary James A. Baker III, Federal Reserve Chairman Paul A. Volcker, other key finance ministers and central bankers, as well as de Larosiere, will attend the session.
The basic accord is the product of a two-year study that was launched by the heads of government at the Williamsburg, Va., economic summit in 1983, in response to pressure from Mitterrand for a review of the international monetary system and the status of international liquidity. The summit directed the finance ministers of the major-currency countries to try to find a way of restoring stability in exchange rate relationships.
The task took on added significance as the American dollar soared to new heights against other major currencies, triggering huge trade deficits in the United States and pushing real interest rates to record levels.
In a speech last November at Harvard, Dini said that "when faced with pronounced exchange rate instability, the international community has had no institutional instrument of any kind with which to tackle the problem. The attempt to follow an ad hoc non-institutional approach has resulted in nothing more significant than frank exchanges of views."
The decision reached by the Group of Ten, if formally ratified by the ministers June 21, is expected to be proposed officially to the IMF at its annual meeting in Seoul in October.
As laid out in a final drafting session of the G-10 deputies in Basel, Switzerland, the report is divided into four main sections: exchange rate volatility; surveillance over the exchange rates; international liquidity, including the SDR question, and the future role of the IMF