Sunday, January 10, 2010

A crucial economic policy dilemma

"It's much better to use the reserves than to borrow at interest rates of 15% or 14%, when the reserves are barely earning 0.5% or 1%." Cristina Fernandez de Kirchner, President of Argentina.

She is referring to foreign currency reserves at the central bank.

To what extent central banks are or should be autonomous of a government?

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