![]() ![]() The strict rules of the currency board provide monetary stability and confidence in the domestic currency, but disable the pursuit of discretionary monetary policy and limit autonomous fiscal policy for the purpose of stimulating an investment cycle and economic development without coordinated accompanying support of monetary policy. ![]() The country applies a currency board as the only acceptable and optimal exchange rate system in order to protect its monetary policy from political in?uences. deflation, internal adjustment, Bosnia and Herzegovina Abstractīosnia and Herzegovina is a small and open economy in transition with great distrust in local authorities and institutions. University of Mostar, Faculty of EconomicsĬurrency board, (un)real exchange rate, devaluation vs.
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