The East Asian financial crisis of 1997 has sparked a vigorous debate on the appropriate exchange rate regime that an economy must adopt. Two extreme options are said to be considered: (a) free float as recommended by the IMF, or(b) very hard peg or dollarization. This Policy Notes discusses the concept of dollarization and the issues attendant to it as it affects the conduct of monetary policy.
The Dollarization Debate: Concepts and Issues
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