In recent years, many emerging economies have been
forced to switch to more flexible exchange rate regimes following recent
exchange crises of the mid-1990s. For other countries in
development, the path to flexibility has been much more serene and the
transition to more flexible exchange rate regimes has been largely
determined by the degree of economic and financial openness of the country.
This clear trend towards flexibility is expected to continue for
many reasons. First, the range of fixed exchange rate regimes has been proven
as more vulnerable to currency crises Bubula and Otker-Robe (2003)
and seizures Rogoff et al (2004) that flexible arrangements. It is
then it is essential for some countries to tolerate greater flexibility
the exchange rate in order to minimize the risks associated with the integration
Economic and Financial Duttagupta and Otker-Robe (2003) 1
, the experience having
showed that countries that liberalize their financial accounts will sooner or later
obliged to adopt a more flexible exchange rate regime. Savings
emerging markets, whose markets are relatively developed and open to
of capital, would benefit, finally, more from the introduction of rate flexibility
exchange rate by "learning to float" and partially overcoming their
"Fear of floating" Rogoff et al (2004).