Argentina broke its supposedly irrevocable currency peg to the dollar a few months later.
Her chief economist, Olivier Blanchard, said his scepticism about the currency peg had been proved wrong.
They cannot rein in their banks as long as they maintain their currency peg.
Rather than making adjustment harder, he says, the currency peg was essential for credibility.
Brazil's currency peg (the real depreciates around 7% a year against the dollar) has already cost it growth.
In Argentina's case, the IMF endorsed, but did not impose, the currency peg.
If these reserves start to decline, it would mean China would need to start selling renminbi to maintain its currency peg.
Mr Duhalde inherited a freeze on most bank deposits, put in place in a last desperate attempt to save the currency peg.
At the time, private investors were selling in the belief that Hong Kong would have to abandon its currency peg to the dollar.
All three countries have fixed exchange rates (currency boards in Estonia and Lithuania, a currency peg in Latvia) fully backed by foreign-currency reserves.
They were a way to keep down inflation, but they also encouraged excessive borrowing in foreign currencies, creating strains that eventually broke the currency peg.
It too is moving more of its production to Malaysia, which it says is cheaper because of the ringgit's low currency peg to the U.S. dollar.
It was obvious to many observers at the time that the longer the government tried to keep the currency peg, the worse would be the eventual pain.
Think of the UK's own ERM crisis: the game was up when Norman Lamont raised interest rates to 15%to defend the currency peg, in the middle of the recession.
To maintain its currency peg, the People's Bank of China has to create enough yuan to satisfy foreign demand for the currency at the going rate of 8.3 yuan to the dollar.
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Already Italy is being compared to Argentina, where a currency peg to the dollar made exports uncompetitive, sparking a recession and, ultimately, a fiscal crisis that forced the country to ditch the peg and devalue the peso.
The currency peg of the Yuan against the dollar, which China has enforced with varying degrees of exactitude over the past few decades, has helped the Chinese government exert greater influence over the growth and contours of its economy.
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The same is true of China, which has a currency peg to the dollar and is thus fully exposed to the rising oil price, and has also, like many other developing countries, become much more reliant on oil in recent years as their economies have moved from agriculture to heavy manufacturing.
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The same is true of China, which has a currency peg to the dollar and is thus fully exposed to the rising oil price, and has also, like many other developing countries, become much more reliant on oil in recent years as its economy has moved from agriculture to heavy manufacturing.
In 1931, as the Austrian bank Creditanstalt collapsed, pulling down the banks of Germany, Czechoslovakia, Hungary and Poland, a run on the German currency forced it off the Gold Standard in May, then the British Labour government struggled to maintain its currency peg - imposing austerity onto its own voters as the price.
The American economist had proposed that Indonesia peg its currency to the U.S. dollar to help stabilize the economy.
An even bigger constraint on China's monetary policy is that it continues to peg its currency to the dollar.
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But even without this pressure, Chinese officials had reason to question their choice of standard to which to peg their currency.
Meanwhile, Iceland's central bank has abandoned an attempt to peg its currency at 131 kronor to the euro after just two days.
Indeed Poland was supposed to peg its currency to the Euro as a pre-condition for joining something that it (very wisely) has refrained from actually doing.
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The central bank also said it would peg its plunging currency at a level of 131 kroner to the euro, or a trade-weighted index of 175, in the inter-bank market.
Some money-watchers have suggested that while Hong Kong continues to publicly stand by the linked-exchange rate peg of its currency to the U.S. dollar, behind the scenes it may be looking for alternatives.
Further, an improving Chinese economy could mean higher commodities generally and also prompt China to become more aggressive in relaxing the peg of its currency against the dollar, which would be supportive for gold, he added.
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