Skip to:
  1. Main navigation
  2. Main content
  3. Footer
Economic Commentary

A Mexican Currency Board?

A lack of confidence in the peso’s purchasing power was fundamental to Mexico’s recent currency crisis and remains central to the nation’s convalescence. In establishing a credible commitment to price stability, countries face a trade-off between 1) adopting institutional forms that limit their government’s ability to generate inflation and 2) relying on an established reputation for successfully controlling the price level. Recognizing that those countries lacking such a reputation must compensate with strong institutional limits on their monetary policy discretion, many economists have suggested that Mexico replace its central bank with a currency board.

The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This paper and its data are subject to revision; please visit for updates.

Suggested Citation

Humpage, Owen F. 1995. “A Mexican Currency Board?” Federal Reserve Bank of Cleveland, Economic Commentary 3/15/1995.

This work by Federal Reserve Bank of Cleveland is licensed under Creative Commons Attribution-NonCommercial 4.0 International