Re: Fw: Argentina's Currency Board

[Warren Mosler <mosler@xxxxxxxx>]

"J. Barkley Rosser, Jr." wrote:

>      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.

Obviously there was no officially pegged convertibility
for the private sector at the CB, so it was really a 'managed float?'

> 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
> >
> >