Independent Currency Authorities: An Analytic Primer

Author/Editor:

Kent Osband ; Delano Villanueva

Publication Date:

July 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper provides an analytic overview of independent currency authorities (ICAs), sometimes called currency boards. ICAs issue and redeem domestic currency against an exchange standard on demand and back such operations through a 100 percent marginal foreign reserve cover. They also impose significant constraints on the banking system and the budget of the country that operates them. When supporting institutions have been put in place, ICAs appear to have promoted price stability, foreign trade, saving, and investment.

Series:

Working Paper No. 1992/050

Subject:

Banking Central banks Currencies Currency boards Foreign exchange Inflation International reserves Money Prices Reserve currencies

Notes:

Also published in Staff Papers, Vol. 40, No. 1, March 1993.

English

Publication Date:

July 1, 1992

ISBN/ISSN:

9781451846881/1018-5941

Stock No:

WPIEA0501992

Pages:

30

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