But this is merely to say that they have no coherent exchange-rate policy: monetary policy and exchange-rate policy (aside from occasional meddling) are operationally indivisible.
Mr. Abe has made it clear that Japan will pursue an aggressive policy of monetary expansion regardless of the monetary and exchange rate policies pursued in other countries.
Officials at the G20 meeting this weekend agreed on the need to strengthen the effectiveness and coherence of bilateral and multilateral IMF surveillance, particularly on financial sector coverage, fiscal, monetary and exchange rate policies.
European monetary union meant the loss of responsibility for monetary and exchange-rate policies.
Moreover, successful monetary union may sometimes require governments that have lost their monetary and exchange-rate flexibility to resort to a more flexible fiscal policy.
As for the stability pact, it seems perverse to impose artificial constraints on borrowing when both monetary and exchange-rate flexibility have just been removed and greater fiscal flexibility may be needed to compensate.
An optimal currency area would require convergence on monetary, fiscal, exchange rate, and political policies, which in turn would lead to productivity and growth rate convergence, explained Roubini.
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The single currency has deprived its members of any independent control over monetary policy or the exchange rate, so the burden of any necessary response to a recession falls more on fiscal policy.
So British businesses should - and do - perform a good deal better than competitors in countries like Italy and Spain, where the exchange rate and monetary conditions are less accommodating.
"A monetary zone must have an exchange rate policy or else it ends up subjected to an exchange rate that does not match the true state of its economy, " he said.
More than a year ago Hanke explained that Brazil's Plano Real, which pegged its currency to the dollar, dangerously quashed free market forces by giving the central bank the power to set both the exchange rate and monetary policies.
"At the root of the euro upheaval is a balance of payment crisis caused by the cumulative effects of a 13-year-old one-size-fits-all monetary policy and a fixed exchange rate for a collection of disparate countries in very different stages of economic and structural development, " he argues.
Floating the yuan would also relieve the monetary authorities of self-defeating exchange rate intervention.
The central bank is supposed to be independent, and is also supposed to be in charge of exchange-rate and monetary policy.
The problem, however, is that policymakers may not want to make their domestic monetary policies subject to formal exchange-rate targets for the sake of global currency-market stability.
Most of the risk in Brazil stems from political interference in the economy through a myriad of surprise macro measures such as taxation on investment, to monetary policy related to the foreign exchange rate.
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.
To regain control over its monetary policy, China needs a more flexible exchange rate.
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Currency crises might also occur because pegging the exchange rate requires governments to use monetary policy in order to maintain the currency's value.
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However, an easy monetary policy can also stimulate the economy through the exchange rate.
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China's monetary policy is also constrained by its rigid exchange-rate regime.
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The three key elements of this policy remained the adoption of a floating exchange rate system, the anchoring of monetary policy to the inflation target and the acceleration of banking sector reforms, he said.
Another way in which monetary policy retains some of its clout is through the exchange rate.
The policy point is that the "imbalances" resulted more from reckless monetary policy than from spendthrift American consumers or Chinese exchange-rate policy.
Authorities have been using monetary policy instruments to cool inflation rather than adjust an exchange rate which many consider to be undervalued.
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Less reassuring, however, their exchange-rate regimes leave little room for monetary tightening.
Growing deficits constrain the use of stimulus efforts to revive the economy, while Serbia's concerns about inflation and exchange rate stability preclude the use of expansionary monetary policy.
"The monetary board has no plans of changing the basic exchange-rate policy, " Singson insisted July 9, the day the stock market fell 4.1% because of worries about the central bank's ability to fight speculators.
Even so, China could still introduce some flexibility into its exchange rate, and so regain control of monetary policy, by adopting a wider band or by pegging to a currency basket rather than just to the dollar.
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For example, the Goldman Sachs monetary-conditions index (based on a weighted average of short-and long-term interest rates and the trade-weighted exchange rate) suggests that America's monetary policy is currently at its tightest since 1989, largely reflecting the strong dollar.
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