Currency Board Arrangements (CBA’s) As A Super Fixed Alternative in Exchange Rate Regime Choice

2005 ◽  
pp. 41-54
Author(s):  
Buks Wessels ◽  
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Currency Board

Chancen und Risiken einer Dollarisierung in Argentinien

2003 ◽  
Vol 52 (1) ◽  
Author(s):  
Ralph Setzer
Keyword(s):  
Exchange Rate ◽  
Financial Integration ◽  
Exchange Rate Regime ◽  
The United States ◽  
Optimum Currency Area ◽  
Currency Board ◽  
Currency Area ◽  
International Investors ◽  
Strong Candidate ◽  
Optimum Currency

AbstractThe collapse of the Argentinean Currency Board revived the debate about the optimal exchange rate regime for Argentina. Given its large exposure to nervous international investors, Argentina is a strong candidate for dollarization, which could provide lower inflation and higher financial integration with the United States. However, Argentina’s poor qualifications for a fixed exchange rate under the traditional optimum currency area criteria and the absence of adequate labor market and fiscal policy structures indicate that dollarization would suffer from the same problems as the Currency Board system. Thus, dollarization, in advance of other fundamental reforms seems a risky strategy.

scholarly journals Foreign currency regimes

2004 ◽  
Vol 47 (3-4) ◽  
pp. 233-248
Author(s):  
Duska Gajic
Keyword(s):  
Exchange Rate ◽  
Foreign Currency ◽  
Exchange Rate Regime ◽  
Currency Union ◽  
Final Conclusion ◽  
Currency Board ◽  
Target Zone ◽  
Advantages And Disadvantages ◽  
Theoretical Analyses ◽  
Negative Outcome

There is no exchange rate regime that can be declared as the best one. Each regime has both advantages and disadvantages. In some situations, a regime can be very positive and in an other, it may have rather negative outcome. In the theory, regimes are classified as follows: currency union, currency board, "truly fixed", adjustable peg, crawling peg, basket peg, target zone, dirty float, free float. This paper addresses "fixed vs. flexible regime" issue and provides description of all the requirements, consequences, benefits, weaknesses and possibilities related to them. The final conclusion is that flexible regimes are more frequently used and preferred by most economists. After all theoretical analyses, policymakers are those who make decisions about the optimal exchange rate regime for the economy concerned.

scholarly journals Macroeconomic regime and labor market. The Argentine experience of the past two decades

Nova Economia ◽  
2015 ◽  
Vol 25 (spe) ◽  
pp. 863-890
Author(s):  
Luis Beccaria ◽  
Roxana Maurizio
Keyword(s):  
Exchange Rate ◽  
Labor Market ◽  
Real Exchange Rate ◽  
Negative Impact ◽  
Exchange Rate Regime ◽  
Currency Board ◽  
International Context ◽  
The Past ◽  
Positive Performance ◽  
Employment Generation

Abstract: This document analyzes the interactions between macroeconomic regimes, employment generation and the dynamics of labor incomes in Argentina under two different macroeconomic regimes: the currency board regime of the 1990s and the high real exchange rate regime that followed. The former, characterized by a strong currency overvaluation, had a negative impact on economic activity and the labor market. However, the maintenance of a competitive real exchange rate does not by itself guarantee the sustained positive performance of the labor market, as it became evident in Argentina during the 2000s. Although the sizable depreciation of the peso -together with a positive international context- favored the expansion of output and employment, the initial concern of maintaining the real exchange rate at a competitive level was not continued with policies aimed to counteract the appreciation trend that appeared a few years after the implementation of the new regime.

A RE-STATEMENT OF SINGAPORE'S EXCHANGE RATE AND MONETARY POLICIES

2003 ◽  
Vol 48 (02) ◽  
pp. 201-212 ◽  
Author(s):  
PAUL S. L. YIP
Keyword(s):  
Hong Kong ◽  
Exchange Rate ◽  
Band System ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Currency Board ◽  
Monetary Policies ◽  
Rate Level ◽  
Rate Policy ◽  
Exchange Rate Level

This policy note, which focuses on Singapore's monetary and exchange rate policies, has a number of objectives. First, it highlights the fact that the Monetary Authority of Singapore (MAS) is equipped with a powerful tool to target the exchange rate level it desires (within limits). Second, it reviews Singapore's exchange rate policy since 1980 and explains that the de facto policy is far more complicated and flexible than the simplistic but oft-noted description of the MAS pursuing a "strong Singapore dollar" policy. Specifically, the paper argues that Singapore's exchange rate regime is an ideal example of the monitoring band system favoured by John Williamson. Third, the paper contrasts the Singapore currency regime with the relatively more inflexible currency board arrangement (CBA) operated in Hong Kong. The relative advantages of Singapore's flexible monitoring band arrangement over Hong Kong's rigidly fixed CBA are highlighted.

scholarly journals The triangle of impossibility versus possible modifications of the Polish exchange rate regime during the preparations for the Euro currency’s adoption

Equilibrium ◽  
2009 ◽  
Vol 3 (2) ◽  
pp. 27-37
Author(s):  
Małgorzata Madrak-Grochowska
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Regime ◽  
Currency Board ◽  
Convergence Criteria ◽  
Currency Market ◽  
National Bank ◽  
Managed Floating ◽  
Economic Stabilization ◽  
Rate Mechanism

The main objective of this paper is to analyze whether and how the Polish exchange rate regime should be modified before Zloty’s adoption to European Rate Mechanism II (ERM II). Possible solutions (it means: currency board, managed floating and adjustable peg) are presented as different nodes of the triangle of impossibility. The conducted research leads to the conclusion that neither currency board nor dirty floating can provide appropriate base for the calculation of the Zloty/Euro central rate. It seems the temporary introduction of adjustable peg, which allows to adjust Polish exchange rate regime to the rules of ERM II in gradual way would be the best solution. Moreover, this option provides The National Bank of Poland with the ability to intervene with the currency market in order to achieve economic stabilization. However, adjustable peg is a good solution for our country as long as both monetary and fiscal authorities cooperate and unify their policy regarding entering the ERM II. Only then can Poland meet all of the convergence criteria.

scholarly journals ADAPTATION TO EXTERNAL SHOCKS WITHIN THE CURRENCY BOARD SYSTEM ON THE EXAMPLE OF THE BALTIC COUNTRIES AND BOSNIA AND HERZEGOVINA

2021 ◽  
Vol 6 (1) ◽  
pp. 161-175
Author(s):  
Marina Jerinić ◽  
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Bosnia And Herzegovina ◽  
Great Recession ◽  
Exchange Rate Regime ◽  
Nominal Exchange Rate ◽  
Currency Board ◽  
External Shocks ◽  
Baltic Countries ◽  
The Baltic

One of the most important economic policy issues, especially in the post-transition countries, is exchange rate regime (ERR), i.e. the question of optimal exchange rate regime that would stimulate economic growth and propagate macroeconomic stability. For small and EU-oriented countries like Bosnia and Herzegovina (B&H), the EU accession processes and character of countries' economic cycle phase are usually highlighted among many factors. The choice of the appropriate exchange rate system is determinated by the specific characteristics of individual countries, time moment and the characteristics of the external shock occurrence. It is generally accepted that monetary instabilities are treated by fixation and real economic shocks by exchange rate fluctuations. An important criterion for assessing the adequacy of the current exchange rate regime is its response to external shocks, such as the Great Recession in 2008. While flexible exchange rate regime is used as an automatic stabilizer, fixed exchange rates place certain restrictions. The process of macroeconomic adjustment in the Baltic States is an example of how large macroeconomic imbalances can be reduced without adjusting the nominal exchange rate and how the currency board can be successfully used as a stage in the euro introduction process. The aim of this paper is to give a comparative overview of the currency board introduction in Bosnia and Herzegovina and the Baltic countries, results achieved and reactions to external shocks (Great Recession in 2008) within this exchange rate arrangement, so conclusions that could be valuable in post-COVID 19 recovery can be drawn. Key words: exchange rates, currency board, external shocks

Exchange Rate Regimes and Economic Stability

2010 ◽  
pp. 29-43
Author(s):  
S. Smirnov
Keyword(s):  
Exchange Rate ◽  
Inflation Targeting ◽  
Exchange Rate Regime ◽  
Exchange Rate Policy ◽  
Real Sector ◽  
Economic Stability ◽  
Exogenous Shocks ◽  
Floating Exchange Rate ◽  
Rate Policy ◽  
Managed Floating

The Bank of Russia intends to introduce inflation targeting policy and exchange rate free floating regime in three years. Exogenous shocks absorption which stabilizes the real sector of economy is usually considered to be one of the advantages of free floating exchange rate policy. However, our research based on the analysis of 25 world largest economies exchange rates and industrial production during the crisis of 2008-2009 does not confirm this hypothesis. The article also analyzes additional risks associated with free floating exchange rate regime in Russia and presents some arguments in favor of managed floating exchange rate regime.

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