8 Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange
Author:
Pierre-Richard Agénor https://isni.org/isni/0000000404811396 International Monetary Fund

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Language:
English
Print Publication Date:
15 Jun 1991
Keywords:
BOOK; price level; rate of inflation; money stock; market rate; market premium; Currency markets; Exchange rates; Multiple currency practices; Currencies; Exchange rate devaluation

Abstract

Widespread trade restrictions and foreign exchange controls have resulted in inefficient patterns of resource use and led to the emergence of parallel markets in goods and foreign currency in many developing countries. The evidence collected over the past few years has shown that current account restrictions (including import licenses, foreign exchange allocations, and import deposit requirements) create incentives for illegal transactions, such as smuggling and fake invoicing, as well as for capital flight and capital inflows via unofficial channels.

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Cover Macroeconomic Models for Adjustment in Developing Countries
Macroeconomic Models for Adjustment in Developing Countries
ISBN:
9781557752192
Publication Date:
15 Jun 1991
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781557752192.071
Pages:
333