Currency Board


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Currency Board

Entity charged with maintaining the value of a local currency with respect to some other specified currency.

Currency Board

An agency of a government that determines the value of the domestic currency. Specifically, the currency board decides whether to peg the currency to another or to allow it to float. Theoretically, it may also peg the currency to the value of some commodity, such as gold, but that is exceedingly rare. In most developed countries, central banks perform the duties of currency boards. As separate entities, they are found mainly in developing countries.
References in periodicals archive ?
Bulgaria: Macroeconomic and Politicaleconomic Implications of Stabilization under a Currency Board Arrangement," Center for Liberal Studies, Sofia.
Replacing the Fed with a Currency Board would remove the whole issue of instability.
The outcome is much different, however, where the expansion of the domestic money supply is a multiple of the initial capital inflow--where, in Machlup's terms, new money is issued on the basis of "domestic credit"--which is the case under the currency board.
The benefits and costs associated with a currency board are very similar to those for dollarization.
Banks closed for four days to allow them to prepare for the new system, and papers released 10 years ago revealed that the Decimal Currency Board fretted about what could go wrong.
The CBK was established in 1969 to replace the Currency Board with a
The bill, dubbed the Financial Stability Pact by the Finance Ministry or a "fiscal board" by analogy to Bulgaria's currency board agreement, envisions amending both the constitution and the law on the structure of the State Budget, setting a limit of two per cent on the annual Budget deficit and 40 per cent on the Budget spending as a ratio of the gross domestic product (GDP).
In fact, in Argentina, people started to withdraw their deposits almost a year before the exit from the currency board, fueling capital flight and feeding back into market pressures to abandon the peg to the dollar - a dynamic that could be even faster and more furious in financially integrated European economies.
According to him, although Estonia fulfils the Maastricht criteria, and though Estonia has a currency board system, Estonia is not fit to adopt the euro, at least not now.
Further progress remains deadlocked pro tem, "We have to agree on the location of the central bank and currency board before the unified currency is launched.
As editor of Asian Monetary Monitor, he proposed a currency board scheme to stabilise the Hong Kong dollar in 1983 that is still in operation.
Neither the Bulgarian free-market currency board nor the Zimbabwean spontaneous (and eventually official) dollarization appears to be in the cards.