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Many emerging market countries have chosen to float their currencies only as a last resort and only when they have been forced so to do. Even those who have eventually floated have still sought to manage or interfere in otherwise floating currency markets in some way. From this, we have the idea of “fear of [...]

Aside from the complete adoption of another and more credible currency, such as the US dollar, the hardest form of currency peg is the currency board. Here, the central bank relinquishes theoretically all discretion over monetary policy. Capital inflows lead automatically to a proportional reduction in money supply by the “monetary authority”, which replaces the [...]