Commentary: Bid A Fond Adios To Fixed Exchange Rates

In the 1990s, Latin American countries, most notably Brazil and Argentina, clamped down on wild inflatiOn with an effective tool: overvalued currencies that they pegged to the U.S. dollar. The controlled exchange rates worked wonders, bringing economic stability to the lives of millions of people who had been caught for years in a spiral of rising prices and falling currencies. The strategy has paid political dividends, too. The biggest is the near-certain reelection of President Fernando Henrique Cardoso on Oct. 4.

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