I really love this guy... great article Rasica.
From the article...
The first question has already been answered in the positive, in the short term, as the history of the exhcange rate since CBI set it in 2004 has been pretty stable and CBI has not been massively pissing away reserves to defend it.
Understand... they have to defend the rate. A large revalue and they could not do that.
more good stuff
Regardless of the precise facts, CBI succeeded in setting, per all available evidence, an exchange rate that was reasonable with respect to economic fundamentals (see the IMF report),
more... he's great
Let me say, however, that I could not give a $% about "theory" - it's a meaningless statement and actually factually incorrect: early pressure in 2004 was towards currency appreciation not collapse (depreciation) as many (esp. Arabs) were speculating c. 2003-2004 on a Kuwaiti style revaluation back up to Sadaam levels (based I may add on a serious lack of understanding of that exchange rate).
