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Independent Currency Authorities: An Analytic Primer

Author

Listed:
  • Kent Osband
  • Delano Villanueva

Abstract

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.

Suggested Citation

  • Kent Osband & Delano Villanueva, 1992. "Independent Currency Authorities: An Analytic Primer," IMF Working Papers 1992/050, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1992/050
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    Citations

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    Cited by:

    1. P. Honohan, 1997. "Currency board or central bank? Lessons from the Irish pound’s link with sterling, 1928-79," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 50(200), pages 39-67.
    2. Arie Arnon & Avia Spivak, 1996. "Monetary integration between the Israeli, Jordanian and Palestinian economies," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 132(2), pages 259-277, September.
    3. Ms. Magda E. Kandil & Samya Beidas-Strom, 2005. "Setting the Stage for a National Currency in the West Bank and Gaza: The Choice of Exchange Rate Regime," IMF Working Papers 2005/070, International Monetary Fund.
    4. Jérôme Sgard, 1999. "Crise financière, inflation et Currency Board en Bulgarie : les leçons d'une transition indisciplinée," SciencePo Working papers Main hal-03585877, HAL.
    5. Chris Melliss & Mark Cornelius, 1994. "New currencies in the Former Soviet Union: a recipe for hyperinflation or the path to price stability," Bank of England working papers 26, Bank of England.
    6. Arie Arnon & Avia Spivak, 1995. "Monetary Integration Between the Israeli, Jordanian and Palestinian Economies," Bank of Israel Working Papers 1995.11, Bank of Israel.
    7. Matthias Sutter, 1996. "A currency board for European Monetary Union outsiders," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 31(3), pages 131-138, May.
    8. Mrs. Marie T Dal Corso, 2004. "An Institutional Framework for Comparing Emerging Market Currency Boards," IMF Working Papers 2004/180, International Monetary Fund.
    9. K. Rudgalvis, 1996. "Establishing a new currency and exchange rate determination: the case of Lithuania," CERT Discussion Papers 9604, Centre for Economic Reform and Transformation, Heriot Watt University.
    10. Bryan W. Roberts, 1994. "Inflation and the Monetary Regime During the Cuban Economic Transition," Annual Proceedings, The Association for the Study of the Cuban Economy, vol. 4.
    11. repec:hal:spmain:info:hdl:2441/6961 is not listed on IDEAS
    12. Haizhou Huang & A. Jorge Padilla, 2002. "Fiscal Policy and the Implementation of the Walsh Contract for Central Bankers," Annals of Economics and Finance, Society for AEF, vol. 3(1), pages 27-42, May.
    13. Bordo, Michael D. & Jonung, Lars, 1994. "Monetary Regimes, Inflation and Monetary Reform: An Essay in Honor of Axel Leijonhufvud," SSE/EFI Working Paper Series in Economics and Finance 16, Stockholm School of Economics.
    14. repec:spo:wpmain:info:hdl:2441/6961 is not listed on IDEAS
    15. Jérôme Sgard, 1999. "Crise financière, inflation et Currency Board en Bulgarie : les leçons d'une transition indisciplinée," Post-Print hal-03585877, HAL.
    16. Lu, Ding & Yu, Qiao, 1999. "Hong Kong's exchange rate regime:: Lessons from Singapore," China Economic Review, Elsevier, vol. 10(2), pages 122-140.

    More about this item

    Keywords

    WP; currency; ICA.; currency board; crawling peg; foreign currency; Ica arrangement; exchange obligation; Ica need; currency authority; board arrangement; Ica wish; pound sterling; Ica system; issued currency; Currencies; Currency boards; Reserve currencies; Inflation; International reserves; Africa; Asia and Pacific; Caribbean; Eastern Europe; West Africa;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other

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