Fw: Argentina's Currency Board

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

     I would add that there certainly are countries
that have tied their currencies to packages of other
currencies, with the most obvious being those that
have tied to either the SDR or the ECU before it
became the euro.
      I have long read that India has a mysterious
policy of tying the rupee to some package of other
currencies, but without telling anybody what they are
or how they are weighted.  Of course for years the
very sensitive issue involved the weight given to the
British pound.  Or, as Oscar Wilde noted to Cecily
in "The Importance of Being Earnest," she should
not read about the fall of the rupee as it was much
too shocking (or some such line...  ).
Barkley Rosser
----- Original Message -----
From: "Alan Cibils" <acibils@xxxxxxxxxxxx>
To: <rosserjb@xxxxxxx>
Sent: Tuesday, April 24, 2001 4:15 PM
Subject: Argentina's Currency Board


> Hi Barkley,
>
> I have been following the PKT discussion on dollarization (on the web, I
am
> not subscribed at this time so I can't post to the list).
>
> What I gather from the Argentine press (I follow it daily on the web), the
> dollar peg has not been abandoned yet. Cavallo seems to be floating the
> idea of tying the peso to a currency basket, thouth the basket would be
> just the US dollar and the euro (he had mentioned the yen at some point,
> but appears to have backtracked from that). It is not clear when the euro
> would come in (there was some statement about waiting till the euro was 1
> to 1 with the dollar).
>
> Ex-president Menem and the soon to be ejected Central Bank president (Pou)
> are the ones pushing dollarization (i.e. adopting the US dollar). I am not
> sure what their gain is with this plan, though I suspect for Menem it is
> more a political move aimed at staying in the limelight and trying to
> appear as having political iniciatives that will "save" the country---all
> of this with the 93 presidential elections in mind (and the Peronist party
> primaries too, since it is by no means a given that he will be the
candidate).
>
> Hope this clarifies somewhat,
>
> Alan
>
>