In this paper, I survey the issue of exchange rate regime choice from the perspective of both the industrial and emerging economies taking an historical perspective. I first survey the theoretical issues beginning with a taxonomy of regimes. I then examine the empirical evidence on the delineation of regimes and their macroeconomic performance. The penultimate section provides a brief history of monetary regimes in industrial and emerging economies. The conclusion considers the case for a managed float regime for today's emerging economies.
International Monetary Fund. Asia and Pacific Dept
-term fiscal framework aimed at smoothing expenditure and building fiscal buffers. This would require improved public financial management and a well-administered broad-based tax system to mobilize non-resource revenues.
Directors welcomed the far-reaching liberalization of the foreign exchange system. They observed that the adoption of a managedfloatregime has facilitated the convergence of the formal and informal exchange rates, and the recent depreciation of the kyat has helped align the exchange rate with longer-term fundamentals. Directors encouraged a further build
International Monetary Fund. Middle East and Central Asia Dept.
enhance CBI’s operational autonomy, collateralize liquidity facilities, define a target inflation range, broaden market-based liquidity management tools, and develop a clear communication policy. They appreciate staff work on the reform of the monetary policy framework, and welcome their reflection on the draft CBI and banking bills to ensure compliance with international best practices.
My authorities remain committed to unifying the exchange rate and returning to a managedfloatregime, expected to take place by end February 2018, once relations with foreign
authorities to ensure policy coordination and price stability. The conduct of monetary policy will be underpinned by a managed float exchange rate regime and the need to maintain inflation in single digit levels. The CBL officially maintains the exchange rate as its policy anchor, but has in the interim reverted to a managedfloatregime owing to low inflows of foreign exchange. It is confident that this regime presents the best option under the current situation, and should facilitate reserve accumulation.
13. In line with the recommendations of the recent Fund TA report
Despite good economic reforms, macroeconomic stability, and a major expansion of the hydrocarbon sector, Bolivia still achieved only modest gains in poverty reduction. Executive Directors stressed the importance of fiscal prudence, domestic taxation, and strengthening of public expenditure management to ensure fiscal sustainability. They commended the central bank for its monetary policy stance. They highlight the need to attain greater equity, transparency, and accountability underpinned by cautious macroeconomic policies. They underscored that Bolivia may face a competitive external environment for its nontraditional exports in the period ahead.