This would eliminate the possibility of any discretionary domestic monetary policy action since the domestic component of the monetary base could only change in response to a change in the foreign currency component of the base. Despite the only limited experience with the currency board arrangement to date, the experience would nevertheless allow us to declare it, provisionally, to be a success.
Some governments which have opted for this arrangement have found, however, that during the recent financial market turbulence, their economies were not immune from contagious spillover despite having fairly healthy economic fundamentals. This is the result of the currency board arrangement not being an unequivocal one since the government in question retains the option of revoking the arrangement.