Floating the yuan would also relieve the monetary authorities of self-defeating exchange rate intervention.

FORBES: China Recalculates: Slow Down And Be Happy

With the nominal exchange rate held down by intervention, this could only come about through a rise in prices, creating expectations of future inflation and so reducing real interest rates.

ECONOMIST: The yen

Indeed, studies have shown that even when emerging-market economies say they are floating (as Malaysia, for example, used to), they tend to rely more heavily than the industrial countries do on interest-rate policy and foreign-exchange market intervention to limit actual movements in the exchange rate.

ECONOMIST: Spoilt for choice | The

Even America, with least to worry about in this respect (because of the size of its economy), has a policy of sorts on the dollar's value including attempting to push the rate around by means of foreign-exchange intervention.

ECONOMIST: Off target

The Tuesday tariff is yet another measure aimed at protecting local industry following sector-specific tax incentives (like the auto industry) and a more aggressive intervention policy to maintain the foreign exchange rate between the U.S. dollar and the Brazilian real at weak levels.

FORBES: Weak Economy Pushes Brazil To Protectionism

Yet he conceded at the weekend meeting that political intervention in the euro's exchange-rate policy should happen only rarely.

ECONOMIST: The single currency

"We would not expect, given the strength of the flows, that intervention would materially change the level of the exchange rate, but we could take potentially the tops off rallies, " said Graeme Wheeler, governor of The Reserve Bank of New Zealand.

WSJ: Asian Governments Take Measures to Battle Strong Currencies

The obvious policy response is intervention to cap the sterling rate, build up foreign-exchange reserves, and offset the monetary effects by issuing sterling debt.

ECONOMIST: Letters