An Analysis of Pegged Exchange Rate Between Bhutan and India
Published By: The Centre for Bhutan StudiesThis paper analyzes the applicability of the theory of optimum currency area to the pegged exchange rate regime between Bhutan and India. Most of the optimum currency criteria hold true for Bhutan and India. The paper then analyzes the implications of establishing a free-floating exchange rate. It outlines the negative consequences and concludes that the present system is optimal. Any attempt to deviate from it will cause economic uncertainties.
Author(s): Karma Galey | Posted on: Jan 29, 2016 | Views()