The economic background [March 1995]

McDonald, Ronnie and Swales, Kim (1995) The economic background [March 1995]. Quarterly Economic Commentary, 20 (3). pp. 1-5. ISSN 0306-7866

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The recent slide in the external value of the US dollar, and the consequent volatility of exchange rates associated with this, has once again raised the appropriateness of the current, rather ad hoc, arrangements by which the key currencies of the world economy are linked together. As a result, proposals for the reform of the International Monetary System (IMS) are likely to become especially topical again. In this article, therefore, we take the current backdrop of currency volatility as a motivation for reexamining the case for the reform of the IMS and the current range of options available.