Currency Board

A currency board is a monetary authority that maintains a fixed exchange rate between its currency and another currency, typically a stable foreign currency like the US dollar. It guarantees to exchange its currency for the foreign currency at that fixed rate, ensuring stability and confidence in the local currency. This system limits the ability of the government to print money, promoting fiscal discipline. Currency boards are often used in countries seeking to stabilize their economy or control inflation by tying their monetary policy to a more stable and reliable currency.