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This sounds like what I once proposed Hungary's central bank should have been doing to prevent the possibility of a currency crisis, namely, accumulating foreign reserves in an amount matching the country's aggregate foreign-currency liabilities. This would act as an automatic negative feedback mechanism in case a carry trade got started.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan
by Migeru (migeru at eurotrib dot com) on Mon Jun 7th, 2010 at 09:20:40 AM EST
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