A Magic Bullet For Indonesia?

But pegging the rupiah to the dollar probably won't work

Is the answer to Indonesia's economic problems a currency board? That's what embattled President Suharto suggests. By permanently linking the exchange rate of the rupiah to the U.S. dollar, currency volatility could be reduced, indebted Indonesian corporations could begin to repay loans, and politics would be removed from setting monetary policy--a big reason that Indonesia is in the current mess to begin with.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.