An Institutional Framework for Comparing Emerging Market Currency Boards

Marie Dal Corso

No 2004/180, IMF Working Papers from International Monetary Fund

Abstract: This paper offers an in-depth review of the institutional arrangements underlying existing currency boards (CBAs) in Argentina (until 2001), Eastern Europe, and Asia. An index of precommitment is derived from an analysis of legislative frameworks and monetary policy operations. The index covers features associated with monetary and exchange rate credibility such as: (i) clarity of legal basis, (ii) quality of reserve coverage, (iii) coverage of monetary aggregates, (iv) claims on reserves, (v) operational autonomy, (vi) transparency and accountability, and (vii) escape clauses. The paper concludes with a discussion of flexibility and credibility trade-offs and exit issues.

Keywords: WP; exchange rate regime; reserve currency; CBA country; CBA statute; CBA framework; stabilization policy; Precommitment; Credibility; Monetary Policy; Institutional Design; Currency Boards; Reserves; CBA autonomy; CBA economy; CBA provisions; CBA adjustment mechanism; CBA feature; CBA strategy; C. quantifying CBA deviation; Exchange rate arrangements; Exchange rates; Conventional peg; Inflation; Currencies; Baltics (search for similar items in EconPapers)
Pages: 42
Date: 2004-09-01
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Citations: View citations in EconPapers (4)

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