currency board regime
A currency board regime is a monetary system where a country pegs its currency to a stable foreign currency at a fixed exchange rate. The domestic currency is fully backed by foreign reserve assets in a specific ratio, ensuring that the central bank can only issue additional domestic currency when it acquires an equivalent amount of foreign reserves. This strict commitment helps maintain exchange rate stability and limits the ability of the central bank to engage in discretionary monetary policy.
Requires login.
Related Concepts (1)
Similar Concepts
- country's currency stability
- currency crisis
- currency devaluation
- currency exchange rate management
- currency exchange rates
- currency manipulation
- currency stability
- currency union
- exchange rate policies
- exchange rate regime
- fixed exchange rate regime
- floating exchange rate regime
- hybrid exchange rate regime
- managed float regime
- pegged exchange rate regime