Front Matter

Front Matter

Author(s):
Charles Enoch, and Tomás Baliño
Published Date:
September 1997
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    Currency Board Arrangements Issues and Experiences

    By a Staff Team led by Tomas J.T. Balino and Charles Enoch and comprising Alain Ize Veerathai Santiprabhob Peter Stella

    INTERNATIONAL MONETARY FUND

    Washington, D.C.

    August 1997

    © 1997 International Monetary Fund

    Cataloging-in-Publication Data

    Currency board arrangements: issues and experiences / by a staff team led by Tomás J.T. Baliño and Charles Enoch and comprising Alain lze, Veerathai Santiprabhob, Peter Stella, — Washington, DC: International Monetary Fund. 1997.

    p. cm. — (Occasional paper, ISSN 0251-6365: 151)

    Includes bibliographical references (p.)

    ISBN 1-55775-668-6

    1. Currency boards—Cost effectiveness 2. Monetary policy 3. Foreign exchange. I. Baliño. Tomás J.T. II. Enoch. Charles, III. Ize, Alain. IV. Santipiahhob, Veerathai. V. Stella, Peter, 1957-VI. Series: Occasional paper (International Monetary Fund); no, 151. HG230.5.C76 1997

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    Contents

    The following symbols have been used throughout this paper;

    • … to indicate that data are not available;

    • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist:

    • – between years or months (e.g., 1994–95 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

    • / between years (e.g., 1994/95) to indicate a crop or fiscal (financial) year.

    • “Billion” means a thousand million.

    Minor discrepancies between constituent figures and totals are due to rounding.

    The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

    Preface

    Currency board arrangements have recently undergone a revival. They have been introduced in this decade in Argentina, Estonia, and Lithuania and have been proposed for a number of other countries. This Occasional Paper provides a comprehensive analysis of the attractions and disadvantages of such arrangements in their various institutional configurations. In particular, the paper asks what defines currency board arrangements, what their strengths and weaknesses are, and what constraints they place on macroeconomic policies. It also reviews country experience with these arrangements.

    The authors thank Manuel Guitián, Malcolm Knight, and V. Sundararajan for guidance and support, colleagues in the Monetary and Exchange Affairs Department and other departments of the IMF, and the members of the Executive Board for valuable comments and stimulating discussion on an earlier version of the paper that was presented at a Board seminar in January 1997. They are also indebted to Miguel A. Kiguel and Wai Sun Yung for arranging the provision of some of the data used in the paper. Kiran Sastry provided research assistance, and Magally Bernal, Amelia de Lucio, and Janet Stanford secretarial assistance. Juanita Roushdy of the External Relations Department edited the paper for publication and coordinated production.

    The views expressed here are the sole responsibility of the authors and do not necessarily represent the opinions of the Executive Directors of the IMF or other members of the IMF staff.

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