This paper provides a summary of the key policies that encourage dedollarization. It focuses on cases in which the authorities’ intention is to gain greater control of monetary policy and draws on the experiences of countries that have successfully dedollarized. Unlike previous work on...

Since 1998, the staff of the International Monetary Fund has published a classification of countries' de facto exchange rate arrangements. Experience in operating this classification system has highlighted a need for changes. The present paper provides information on revisions to the system in...

This paper compares monetary policy of currency boards with that of the franc zone during the period 1956-2005. It concludes that monetary policy in the zone was more autonomous than under a currency board, even though both systems faced the same exchange rate constraint. So far, the contingency...

In 2002, fourteen countries were candidates for accession to the EU. A large number of them were ex-socialist countries. The Treaty on Monetary Union (1992) imposed several criteria as conditions for accession to the Monetary Union, independent from the EU accession. The “Euro accession”...

Since Krugman 1979, we know that the fixed exchange rate regimes have a propensity to fail because governments are unable to commit simple monetary rule in order to avoid divergence between base money supply and reserve variations. The currency boards (CB) propose a radical solution: an...

The Franc Zone rests on an original mechanism, the compte d'opération (CO). This account gives the CFA a credible external convertibility backed by the French Treasury. We argue that the monetary policy imposed by the CO aims at balancing external accounts, in a manner inspired by the monetary...

This paper models the relationship between short-term rates and excess reserves in an interest rate corridor as a logistic function estimated for the Eurosystem. The estimate helps to identify conditions in which short-term rates become unanchored, that is, they move away from the policy rates...

This paper introduces a theoretical framework for liquidity management under fixed exchange rate arrangement, derived from the price-specie flow mechanism of David Hume. The framework highlights that the risk of short-term money market rates un-anchoring from the uncovered interest rate parity...