THE LOGIC OF THE CURRENCY BOARD MONETARY REGIME

Yıl 2010, Cilt: 1 Sayı: 1, 72 - 86, 01.04.2010

Momtchil Karpuzanov

Öz

The Currency Board (CB) is a particular monetary regime combining legally
set fixed exchange rate and full coverage of domestic currency by highly liquid holdings
in a stable reserve currency with an explicit relinquishment of active monetary policy by
national monetary authorities aiming at enhancing and making this commitment more
credible. It exhibits the theoretical functioning of an automatic mechanism linking the
performances of the domestic economy as represented by the balance of pay men ts
dynamics providing reserve currency to the Currency Board and the money supply
dynamics based on it. In the short-run such a political decision largely contributes to
stabilisation policies and exhibits significantly positive results in fighting injlation,
rejlating economic activity and setting hard budget constraints to all economic agents.
Although it is often related as the hardest of all pegs, it is argued here that it is but a
mere monetary substitution of external to domestic currency thus breaking the necessary
or even vital link provided by the monetary procedure, as a relation between the
monetary product and the economic behaviour of economic agents. Therefore the CB
introduces a relative-price distortion through a continuous real exchange rate
appreciation. It consists therefore in hiding and postponing economic troubles amplified
by the necessity of an exit strategy towards discretionary managed monetary policy by
the Central Bank or dollarization / euroization and total dependence on foreign
discretionary monetary policy. 

Anahtar Kelimeler

Currency Board, monetary procedure, hard peg exchange rate, relative price system distortion

THE LOGIC OF THE CURRENCY BOARD MONETARY REGIME

Öz

Para Kurulu yasal olarak sabitlenmiş bir kur ve ulusal paraya tam kapsama
getiren bir para rejimidir. Tam kapsama güçlü bir rezerv para birimi cinsinden yüksek
miktarda likidite bulundurulması ve ulusal otoritenin aktif para politika uygulamalarını
terk etmesini içerir. Bununla amaçlanan güvenilirliği arttırmaktır. Para kurulu
ödemeler dengesi dinamikleri ile ifade edilen ulusal ekonominin performansının teorik
işleyişini göstermektedir. Kısa vadede para kurulu ekonomik dengeleme politikaları,
enjlasyonla mücadele, ekonomiyi canlandırma ve sıkı bütçe uygulamaları konularında
katkı sağlamaktadır. Para kurulu dövizin ulusal para ile ikamesini ifade etmekte ve en
zor kur çapalardan (peg) birisi olarak kabul edilmektedir. Böylelikle, para kurulu uygulamaları, parasal prosedürler aracılığı ile parasal ürünler ve ekonomik ajanların
rasyonel davranışları arasında sağlanan hayati bağı koparmış, engellemiş olur. Sonuç
olarak para kurulu sürekli reel kur artışları aracılığıyla bağıl fiyat bozulması (distortion)
sağlar. Para kurulu, merkez bankalarının para politikaları sonucunda gizlenen veya
ötelenerek ileride daha büyük finansal sorunları veya "dolarlaştırma / avrolaştırma"
nedeniyle yabancı para politikalarına bağımlı hale gelmeyi engeller.

Anahtar Kelimeler

Currency Board, monetary procedure, hard peg exchange rate, relative price system distortion

Kaynakça

• Centi, J.-P. (1994), "Morıey and Credit in an Open-Ended Univcrse", working paper, Mont Pelerin Society General Meeting, Cannes, Frarıce, September 2Stlı _30 tlı ı994.
• Centi, L-P. (1984), Integration europeenne el eoneurrence des monnaies, Economica, Paris.
• Dupuy M. (2000), "La credibilite des regımes de Currency Boards dans un contexte d'ouverture eroissante: les enseignements de l'experience argentine", in Colloque du GDR "Economie et Finances internationales quantitatives'', June, 23rd & 24tlı 2000.
• Enoeh C. & A.-:\1. Gulde (1997), "Making a Curreney Board Operational", in IMF Paper on Policy Analysis and Assessmenı, I:\lF PPAAl97110, :\ovember 1997.
• Ghosh A. R., A.-:\1. Gulde & H. C. Wolf (1998), "Curreney Boards: The ultimate Fix?", in IMF Workingpaper, January 1998.
• Hanke S. H. (2000), "The Disregard for Curreney Board Realities", in Cato Journal, Vol. XX, :\°1, pp. 49-59.
• Hanke S. H. (2001), "Argentine Endgame: Couple Dollarization with free Banking", Cato Institute, Foreign Policy Briefing, :\°67, Deeember 4 th 2001.
• Hayek F. A. (1984), "The Future Unit of Value", in Salin, P. (ed.), Currency competition and monetary union, Martirrus :\ijhoff Publishers, 1984.
• Hayek F. A. (1978), Denationalisation of Money - The Argument Refined An Analysis of the Theory and Practice of Concurrent Currencies, 2 nd ed., The Institute of Economic Affairs.
• Horwitz, S. (1994), "Commercial Banking in a Free Soeiety", İn The Freeman, The Foundation for Eeonomie Edueation, Vol. XLIV, "KO 7, July 1994.
• Le Maux, L. (2003), "Dollarisation offieielle: analyse eritique et alternative", in L 'actualite economique, Vol. 79, ~O 3, pp. 367-391,2003.
• Le Maux, L. (2006) "Banking Board et Currency Board", in Revue d'Economie Politique, Vol. 117, ~04, pp. 575-599,2006. .
• Mises, L. (1912), Theorie des Geldes und der Umlaufsmittel, Vienna & Munich : Duneker and Humbolt, 1912, translated by H. E. Batson, The Theory of Money and Credit, London: Jonathan Cape Ltd., 1934 et Irvington-on-Hudsorı :\. Y. : The Foundation for Economic Edueation, 1971.
• Nenovsky, N. (1999), "Une econornie en transition a-t-elle vraiment besoin dune Banque Centrale? La Caisse dEmission en Bulgarie." in Revue d'etudes comparatives Est - Ouest, Vol. XXX, N° 4, pp. 65-96.
• Nenovsky, N. & K. Hristov (2000), "Currency Cireulation after Curreney Board Intraduction in Bulgaria (Transactions Demand, Hoarding, Shadow Economy)", in Discussion Papers, Bulgarian :\ational Bank, DP 13, Sofia, 2000.
• Nenvosky, N. (2001), Ca0600Hume JIapu - Bısnpocu Ha WWI-IWI1U4ec/{amameopun (Free Money - Economic Theory Issues), Pr. Mariri Drinov Academic Publishing House, Sofıa.
• Nenovsky N., K. Hristov & M. Mihaylov (200 ı), "Cornparing Curreney Board Automatic Mechanism in Bulgaria, Estonia cnd Lithuania", İn Journal des Economistes et des Etudes Humaines, Vol. XI,:\o 4, pp 575-616.
• Nenovsky, N. (2002), "Improving Monetary Theory in Post-communist CountriesLooking Baek to Cantillon", in Discussion Papers, Bulgarian National Bank, DP 28, Sofıa, 2002.
• Nenovsky, N. & K. Hristov (2002), "The new eurrency boards and diseretion: empirical evidenee from Bulgaria" in Economic Systems, Vol. XXVI, pp. 55-72.
• Nenovsky, N., E. Peev, & T. Yalamov (2003), "La liaison banques - entreprises sous le regime de Curreney Board: Etude empirique pour la Bulgarie", in Revue detudes comparatives Est- Ouest, Vol. XXXIV, N° 2, 2003, pp. 53-81. North G. (2002), Mises on Money, Liberty Fund.
• Oppers E. S. (2000), "Dual Curreney Boards: A Proposal for Curreney Stability", in IMF Working Papers, Deeember 2000.
• Raybaut, A. & D. Torre (2004), "Urıions monetaires, Caisses dErnission et Dollarisation; Les fondements analytiques des systemes de change « ultra - fıxes »", in Revue deconomie financiere. 2004.
• White L. H. (1986), "A Subjeetivist Perspeetive on the Defınition and Identifıeation of Money", in 1. M. Kirzner (ed.), Subjectivism, Intelligibility, and Economic Understanding, New York University Press, New York, ı986.