CURRENCY BOARD ROLE IN MONETARY STABLIZATION AND ECONOMIC DEVELOPMENT OF BOSNIA AND HERZEGOVINА
Journal Title: EMC Review: Časopis za ekonomiju i tržišne komunikacije - Year 2014, Vol 7, Issue 1
Abstract
Exchange rate price in which one currency exchange for another represent very important indicator of competitive of economy in world market. Currency Board represent fi xed exchange rate system where domestic currency is attach for one or more currencies , as reserve currency. Reasons for impose and apply ,in cases of all countries, are large economic crisis in country following the unstable political situation. In this cases, Currency Board serves as effi cient instrument to set up macroeconomic balance, keeping domestic currency parity and prices stable in short and middle period of time. In long period of time Currency Board can stand restrictive factor for economic activity stimulation, because monetary policy action limitation, as important factor for economic growth and development.Unlike in Bosnia and Herzegovina is, of most of countries that apply fl uctuating exchange Council, applyingrigid form of fl at exchange rate or currency board. By currency board, it is trying to provide stable economic system in country, price stability, speaking of low infl ation rate. Its primary role is completely accomplish, which means important base for substantive economic development of country. Today in Bosnia and Herzegovina do not exist infl ation manipulation possibility, exchange rate have not large fl uctuation, which contribute to macroeconomic stability of country.Currency board hitherto, adhere without big shocks and request for abolish, but with limited eff ect as a factor of actuate of economic growth and development.
Authors and Affiliations
Marjanac Dražen
Keywords
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