The Choice Of Exchange Rate Regime And Monetary Target In Highly Dollarized Economies

This paper examines the implications of high degrees of dollarization for the choice of exchange rate regime and the information content of various monetary aggregates in developing countries. It concludes that high degree of currency substitution argues for more fixed exchange rate regimes, may be appropriate. It is also determined weather the most informative monetary aggregate include dollar assets. Based on an analysis of five countries, the paper concludes inter alia that broader aggregates that include dollar assets perform better tha

Provided by: International Monetary Fund Topic: Date Added: Feb 2003 Format: PDF

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