02157cas a2200277 a 4500 AALejournalIMF005061 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451869781 1018-5941 BD-DhAAL BD-DhAAL Wang, Jian-Ye. The Choice of Monetary and Exchange Rate Arrangements for a Small, Open, Low-Income Economy : The Case of Sao Tome and Principe / Jian-Ye Wang, Nisreen Farhan, Amar Shanghavi, Marcio Ronci. Washington, D.C. : International Monetary Fund, 2008. 1 online resource (37 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper assesses Sao Tome and Principe's monetary and exchange rate arrangements in light of the country's monetary history and the relevant experience of comparable countries in Africa. The study highlights several structural characteristics of Sao Tome and Principe including its very small size, high degree of openness, extensive use of foreign currencies, and inflexible product and factor markets in the consideration of an appropriate monetary and exchange regime. Firmly anchored currency arrangements, defined in this paper to include memberships in monetary unions or hard pegs, are found to be preferable to the status quo of a managed float. The paper applies statistical methods and takes into account other factors to identify the appropriate anchor currency. It stresses that fiscal discipline and prudent debt management are the main prerequisites for a firmly anchored currency arrangement. Mode of access: Internet Farhan, Nisreen. Ronci, Marcio. Shanghavi, Amar. IMF Working Papers; Working Paper ; No. 2008/118 Full text available on IMF http://elibrary.imf.org/view/journals/001/2008/118/001.2008.issue-118-en.xml IMF e-Library