If the authority appears to be targeting not just the exchange rate, but interest rates too, then the government's commitment to the peg comes into doubt.

ECONOMIST: The Hong Kong dollar: Off the peg? | The

The current stampede of industrial and emerging countries alike toward floating-cum-inflation targeting, and away from exchange-rate and monetary anchors, suggests that this combination is the only real alternative to giving up a national currency in favour of monetary union or dollarisation.

ECONOMIST: Letters

Exchange-rate flexibility (which is a prerequisite for inflation-targeting) can also bring problems.

ECONOMIST: Floating with an anchor

The inflation-targeting regime, introduced after Britain was spat out of the European exchange-rate mechanism in 1992, was already proving a success.

ECONOMIST: The British budget