Lok Sang Ho

PBC's Proposal for International Monetary Reform

The key point is that countries that tie their currencies to the benchmark currency basket, with or without indexing against inflation, will be less influenced by exchange rate fluctuations caused by capital flow swings, which can be very damaging. I am not saying that all currencies can do this. Some currencies, particularly those from economies with greater financial market depth, should be allowed to float more freely, subject to monetary policy discretion. But other countries, those with shallower financial markets, can peg their currencies to the basket at levels that facilitate international trade.

Global Economic Revival Plan Must Include Realignment of Exchange Rates

Presently the main problem with manufacturers anywhere is certainly the decline in orders. However, with a super strong currency, any meagre export that you may achieve will bring you a negative net income. Exports simply becomes not profitable because it costs you more to produce the good than the marginal revenue from selling an additional unit. A strong currency compounds the problem of a shortfall in orders. I am arguing in favor of exchange rates that allows exporters in every country to garner a profit.