Teeth for the Bulgarian Lev: A Currency Board Solution
Steve H. Hanke
Johns Hopkins University - Department of Economics
Center for Financial Stability
Washington, D.C.: International Freedom Foundation, 1991
Bulgaria needs to give its monetary reform instant credibility, to avoid the dangers of continuing inflation on the one hand and depression on the other. A fixed exchange rate system with a central bank always fails. There is, however, one proven system that will successfully maintain a fixed exchange rate - the currency board system. To establish monetary confidence in the Lev, Bulgaria should replace its central bank with a currency board. A currency is explicitly designed to maintain a fixed exchange rate. A board is easy to establish and operate, and it has worked successfully time and time again. Indeed, currency boards have always been able to maintain fixed-rate currency convertibility, even during the most trying times.
Number of Pages in PDF File: 36
Keywords: Steve, Hanke, Kurt, Schuler, Currency, Board, Solution, Bulgarian, Lev, Teeth, International, Freedom, FoundationAccepted Paper Series
Date posted: April 30, 2013
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