But be careful: flexible rates are not a panacea, they are not a substitute for keeping your house in order. It may be asked at this point whether European monetary integration can be a model for an emerging region. There is no simple answer to that.
2  BIS Review 171/2010  Similarly, deterioration in the external accounts, either because of a large gap between payments and receipts or lack of funds to finance it, cannot continue without an adjustment in the exchange rate. Attempts to maintain stability in the exchange rate by supplying the required foreign currency cannot be achieved on a sustained basis without interest rate increases.