The Evolution of Exchange Rate Targeting

  • Aerdt C. F. J. Houben
Part of the Financial and Monetary Policy Studies book series (FMPS, volume 34)


Exchange rate targeting had fallen out of favour in the first half of the 1970s. The collapse of Bretton Woods signalled a global shift towards greater exchange rate flexibility and the European response in the form of the ‘snake’ common margins agreement did not offer a broadly acceptable alternative. Indeed, as participation dwindled, the snake symbolised how limited the common ground was on the strategic objectives of monetary policy and how pitifully little was left of Europe’s collective monetary ambitions. But, despite its shortcomings, the snake did constitute a nucleus of monetary stability in Europe. It was around this nucleus that new monetary initiatives could be built once greater like-mindedness in monetary policy objectives returned.


Exchange Rate Interest Rate Monetary Policy Central Bank Real Exchange Rate 
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Copyright information

© Springer Science+Business Media Dordrecht 2000

Authors and Affiliations

  • Aerdt C. F. J. Houben
    • 1
  1. 1.De Nederlandsche BankAmsterdamThe Netherlands

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