Economic Issues

Fixed or Flexible? Getting the Exchange Rate Right in the 1990s

Author/Editor:

Jahangir Aziz ; Francesco Caramazza

Publication Date:

April 17, 1998

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This paper examines the recent evolution of exchange rate policies in the developing world. It looks at why so many countries have made a transition from fixed or "pegged" exchange rates to "managed floating" currencies. It discusses how economics perform under different exchange rate arrangements, issues in the choice of regime, and the challenges poised by a world or increasing capital mobility, especially when banking sectors are inadequately regulated or supervised.

Series:

Economic Issues No. 1998/002

Subject:

Conventional peg Currencies Exchange rate arrangements Exchange rate flexibility Exchange rates Foreign exchange Money