Re: Fw: Argentina's Currency Board

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

Warren,
      I really cannot claim any solid expertise
on the management of the Indian rupee.  Perhaps
there is somebody lurking on the list who knows
more?  But, my understanding, which is based on
reading about its management in the past that may
not be the same currently, was the it was indeed a
managed float.
     The issue was that it was widely
believed that the managed float was based on some
secret equation that involved some balance of other
currencies.  So, there was much wondering about
which currencies and what weights and how often
these were changed and what other factors went into
this secret equation (or whether there even was one).
Barkley Rosser
----- Original Message -----
From: "Warren Mosler" <mosler@xxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Tuesday, April 24, 2001 8:43 PM
Subject: Re: Fw: Argentina's Currency Board


>
>
> "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
> > >
> > >
>
>