Currency Boards

A currency board is a monetary system where a country's central bank commits to exchanging its currency for a foreign anchor currency at a fixed rate, using its foreign currency reserves to back all of its domestic currency in circulation. This setup creates a strong link between the local and foreign currency, helping to stabilize prices and maintain trust. Essentially, the currency board acts like a guarantee that your local money can always be exchanged for the foreign currency at the established rate, limiting the country's ability to print money freely and helping control inflation.